OeKB Annual Report 2010

The complete perspective.
Annual Report
2010
Oesterreichische Kontrollbank Group
EUR million (except lines beginning with Number of)
2007
2008
2009
2010
OeKB Highlights
Average number of employees of OeKB Group Consolidated financial statements Consolidated balance sheet total at 31 December Equity including minority interest Operating profit Profit before tax Profit for the year attributable to shareholders of the parent Return on equity in % Cost/income ratio in % Guarantees of the Republic of Austria under the Export Guarantees Act New guarantee contracts issued Guaranteed export sales (estimate) Guaranteed exports in % of total Austrian exports Total Austrian exports (excluding services) Number of new guarantee contracts issued Aggregate guarantee exposure limit, at 31 December Aggregate guarantee exposure (i.e., limit utilisation), at 31 December Number of guarantees in place Premium and interest income Gross claims paid by the Guarantor Recoveries on claims paid OeKB Export Financing Scheme New commitments issued Total lending commitments outstanding at 31 December Of which disbursements outstanding Loan funds disbursed Repayments received Increase/(decrease) in net loans outstanding Total funds used under the Export Financing Scheme Limit on aggregate guarantee exposure under 1981 Export Financing Guarantees Act Utilisation of the guarantee exposure limit at 31 December Total new guarantees issued Capital Market Services Bond market Federal bonds administered by OeKB CSD.Austria EUR/ATS bonds DS.A volume of transactions (nominal, internal, double counting) Number of depositors/classes of securities 9,230 215,962 627,960 141/20,631 5,619 249,908 818,153 157/20,550 18,210 273,420 813,240 156/20,217 17,007 288,347 852,502 167/22,398 9,803 32,919 29,537 8,726 4,795
+3,931 365 363 385 396
33,019 440 83 74 59 20.58

45.18
41,546 456 91 28 22 7.71

44.14
34,252 527 85 119 91 28.85 47.45
35,802 569 79 93 72 21.02 50.24
12,316 4,395 4 114,680 1,225 45,000 37,460 3,994 250 328 188
1
12,063 3,914 4 117,525 1,032 50,000 44,446 3,995 242 380 262
1
5,160 3,644 4 93,739 858 50,000 40,650 3,833 89 333 353

1
3,869 3,666 3 108,740 2 948 50,000 38,508 3,859 190 116 36
12,225 39,143 36,803 12,054 4,788

+7,266
4,971 34,075 31,401 4,441 9,843

(5,402)
4,413 33,246 29,429 2,924 4,896

(1,972)
38,395 40,000 32,573 14,416
45,499 45,000 38,486 17,108
41,965 45,000 33,745 8,230
26,787 45,000 31,658 6,294
Sources: 1 Statistics Austria 2 December 2010 forecast by WIFO, the Austrian Institute of Economic Research
Oesterreichische Kontrollbank Aktiengesellschaft

Annual Report 2010
Annual Report 2010
Why does it say The Complete Perspective on these reports?

The reason is that our aim at OeKB and the Group companies is always to balance meticulous attention to detail with a firm grasp of the big picture, in all its intricacy and interconnectedness: The export markets and their risk situation, the capital and energy markets, and the rapidly growing wealth of news and data. With this special combination of wide-angle vision and close-up precision, we deliver services that help our clients achieve success in a complex world, serving everyone from public sector principals, to exporters and outward foreign investors, to capital market participants and energy suppliers.
Annual Report 2010
Letter from the Executive Board
Dear Reader The world economy recovered somewhat in 2010 thanks to considerable growth in emerging markets. This was beneficial for the Austrian export industry as well: After sharply contracting in the previous year, exports rose by about 16% in 2010. This upswing was vigorously and effectively supported by the export finance and insurance entities of the OeKB Group Oesterreichische Kontrollbank AG, OeKB Versicherung, PRISMA Kreditversicherung, and Exportfonds with a particular focus on small and medium-sized companies. Likewise, our subsidiary Oesterreichische Entwicklungsbank AG, the development bank, achieved a significant increase in its financing for private sector projects in developing and newly industrialised countries. In view of Austrian companies still subdued foreign direct investment activity, the main use of the Austrian government guarantees under the Export Guarantees Act and of the Export Financing Scheme operated by OeKB was in supporting exports of goods and services. As in the years before, the guarantee system generated a substantial revenue surplus. In export finance, since autumn 2010, soft loans are available for an additional 18 countries and, in certain situations, soft loan financing is possible also for service exports. We successfully completed OeKBs delivery of the Austrian governments temporary programme of guarantees under the Corporate Liquidity Support Act, which helped large Austrian companies weather the financial and economic crisis and preserve jobs. The end of 2010 also saw the completion of the special function served by OeKB in conducting the business activities of Oesterreichische Clearingbank AG. For the Austrian capital market, OeKB further expanded its central role as a financial market services and information hub and entrenched itself as a full-service provider for the organisation and execution of shareholder meetings. The demand for the high-quality services delivered under the OeKB brand is made clear not only by the interest in our well-established CEE Business Climate Index, but also by the uptake of other services in information and knowledge management and of specialised services from OeKB Business Services GmbH. This Annual Report is distributed together with the Export Services Annual Review and OeKBs Sustainability Report. The publications review our services to the export industry and foreign direct investors, and document our consistent efforts to ensure corporate responsibility. That we are able to demonstrate our performance convincingly is shown by OeKBs winning the Austrian Sustainability Reporting Award for the third time and being honoured with the EMAS Award from the Austrian environment ministry.
Johannes Attems
Rudolf Scholten
Why does the OeKB Group offer so many different services?

This rich blend makes sense because all our services have one thing in common: They help businesses to compete successfully. For example, through risk protection products, attractive financing, proven clearing systems and relevant business news.
Andrea Schnabl
Manager for IT Controlling/Organisation and Risk, IT Department

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Annual Report 2010
Contents
Page
I. General information II. Group management report for 2010

1 Business performance and financial and economic situation
21
2 3 4
Management of Austrian federal government guarantees by OeKB OeKB Export Financing Scheme sterreichischer Exportfonds GmbH
23 29 35
5 6 7 8
Capital market CentralSecuritiesDepository.Austria CCP Austria Abwicklungsstelle fr Brsengeschfte GmbH Energy Market Services
35 41 44 45
9 10 11 12
Information Services OeKB Business Services GmbH Oesterreichische Entwicklungsbank AG OeKB EH Beteiligungs- und Management AG
46 48 49 49
13 14 15 16
System of internal control Risk management Human resources Sustainability at OeKB
53 54 55 57
III. OeKB Group Consolidated Financial Statements for 2010 IV. Auditors Report
61
102
Legend for data presented in this report
Amount is zero. 0 Amount is smaller than half of the stated unit. Totals may not add due to rounding.
Annual Report 2010
I. General information
1 Shareholders and share capital
Share capital of EUR 130 million
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB or OeKB AG), an Austrian public limited company, has a share capital of EUR 130 million. In view of the special functions performed by OeKB, its shares are registered ordinary shares that are not listed on the Vienna Stock Exchange. The shares may be transferred only with the consent of the Supervisory Board.
Shareholders
Number of shares
Percentage
Distribution of the share capital (at 31 December 2010)
CABET-Holding-Aktiengesellschaft, Vienna (UniCredit Bank Austria Group) UniCredit Bank Austria AG, Vienna Erste Bank der oesterreichischen Sparkassen AG, Vienna Schoellerbank Aktiengesellschaft, Vienna AVZ Finanz-Holding GmbH, Vienna Raiffeisen Zentralbank sterreich Aktiengesellschaft, Vienna BAWAG P.S.K. Bank fr Arbeit und Wirtschaft und sterreichische Postsparkasse Aktiengesellschaft, Vienna Raiffeisen OeKB Beteiligungsgesellschaft mbH, Vienna Oberbank AG, Linz Bank fr Tirol und Vorarlberg Aktiengesellschaft, Innsbruck BKS Bank AG, Klagenfurt sterreichische Volksbanken-Aktiengesellschaft, Vienna
217,800 142,032 113,432 72,688 72,600 71,456 44,792 44,000 34,224 26,888 26,888 13,200 880,000
24.750 16.140 12.890 8.260 8.250 8.120 5.090 5.000 3.890 3.055 3.055 1.500 100.000
2 Strategic positioning of OeKB

OeKB AG is a financial services provider in the Austrian banking industry. OeKB was founded on 22 January 1946 to provide specialised banking services. It has its registered office in Vienna (Company Register Number FN 85749 b, Vienna Commercial Court).
2.1 Specialised services benefiting the overall economy

OeKBs activities are targeted to the needs and interests of the economy as a whole. It provides its services across business sectors, in a centralised manner, impartially and in accord with its sustainability policy. OeKB has a long tradition of fulfilling these special functions in its major areas of activity Export Services and Capital Market Services as well as in its Information Services business.
Annual Report 2010
General information
Export Services
In step with demand, these three main business segments are expanded and developed by adding new services. In this process, OeKB strives to identify and exploit synergies to enhance efficiency. The financial industry, the economy at large and the public sector all benefit from OeKBs wealth of expertise and experience. This strengthens stakeholders trust a trust that consistently makes OeKB the provider of choice for an ever-growing range of financial, processing and information services, delivered from its position at the centre of the financial market. In the international capital markets, OeKB is well-regarded as a frequent and high-quality issuer of debt securities. Specialisation and innovation are also the strategies with which OeKB meets future challenges. As always, it does this in harmony with its shareholders and coordinates its activities with the entire banking sector, the export industry, capital market participants and the ministries and institutions involved. OeKBs business strategy and philosophy are marked by a clear focus on markets and customers, a commitment to sustainability, and an emphasis on continual innovative development of its portfolio of products and services. The Banks strong sense of social corporate responsibility makes itself felt in the efficient management of costs, earnings and risks, as well as in a motivating and environment-friendly work atmosphere that fosters an achievement-oriented corporate culture.
Valuable synergies for the export and banking industries are harnessed thanks to the fact that OeKB is both responsible for the delivery of export guarantees from the Austrian government, and able to provide the associated export financing. Working in the context of current Austrian export development policy, OeKB is quick to respond to changing conditions and requirements by adjusting its offering and developing new processes accordingly. This ensures that Austrian exporters and outbound foreign direct investors always have access to a competitive range of helpful products and efficient services.
Capital Market Services
OeKBs strategic thrust in Capital Market Services, building on its key role as a securities depository and manager, is to expand its existing services to banks, securities exchanges and all capital market participants. In addition to these functions, the Bank offers services that leverage the power of the latest information technology. Especially in view of growing EU harmonisation in the securities business and the resulting increase in cross-border movement of nonphysical securities, OeKBs technical innovation, modern financial data services and constantly expanding international contacts are vital to a globally competitive Austrian securities market.
2.2 Range of services
OeKB performs the following special functions in the Austrian financial system:
Management of export guarantees of the Republic of Austria, as the governments agent under the Export Guarantees Act OeKBs Export Financing Scheme
Organisation and administration of Austrian government bond issues Issuer Services Notification office under the Capital Markets Act CentralSecuritiesDepository.Austria and processing of off-exchange securities transactions Energy Market Services Major broker of financial and economic information
Annual Report 2010
General information
3 Corporate governance
Executive Board
OeKB AG is not a listed company, but is nevertheless guided by the Austrian Code of Corporate Governance to the extent that the Codes principles are applicable. The Austrian Code of Corporate Governance, first presented to the public in 2002, is reviewed and revised annually in the context of national and international developments. The most recent amendments to the Code, which promote even greater transparency and reflect a change in the Stock Corporation Law Amendment Act, were made on 1 January 2010. The Code in its full wording is available at www.corporategovernance.at.
The two-member Executive Board of OeKB AG is responsible for managing the Group. Its decisions comply with all relevant laws, the Articles of Association and the Executive Boards internal rules of procedure. The division of responsibilities and the internal cooperation of the Executive Board are set out in its internal rules of procedure. The Executive Boards compensation includes both fixed and performance-based variable components. The results-based portion is determined by long-term performance measures. The disclosure under rule 31 of the Austrian Code of Corporate Governance concerning executive compensation is omitted in reliance on section 266(7)b Austrian Commercial Code; item 31 is a so-called C-rule or comply-or-explain rule.
Cooperation between the Supervisory Board and Executive Board
The Executive Board provides the Supervisory Board with regular, prompt and comprehensive reports on all relevant business developments, including the risk situation and risk management at OeKB and significant Group companies. The aim of good corporate governance in managing the Groups business is pursued through open discussion and communication between and within the Executive Board and Supervisory Board. The Executive Board sets the Groups strategic direction together with, and subject to the approval of, the Supervisory Board and regularly discusses the status of strategy implementation with the latter Board. The Supervisory Board meets at least four times per financial year.
Supervisory Board
The Supervisory Board is responsible for supervising the Executive Board and supporting it in managing the Group, particularly in making decisions of fundamental importance. In the year under review, the Supervisory Board was composed of 14 shareholder representatives and eight employee representatives. As a result of an agreement among shareholders, the number of board members deviates from C-rule 52, which stipulates that supervisory boards should have a maximum of ten members, excluding the employee representatives. The membership of the Supervisory Board is presented from page 12 onward. The Supervisory Boards remuneration is determined at the Annual General Meeting and is shown in note 54 to the consolidated financial statements. The employee representatives perform their responsibilities on the Supervisory Board in the course of their ordinary employment.
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Annual Report 2010
General information
Transparency and auditing
The Supervisory Board has formed an Audit Committee and a Working Committee. The members of these committees are Erich Hampel (Chairman and Financial Specialist), Walter Rothensteiner and Martin Krull. The Audit Committee met twice in 2010. The Audit Committee is responsible primarily for the auditing, and preparation of the adoption, of the company financial statements, the proposal for the appropriation of profit and the company management report; for the auditing of the consolidated financial statements and Group management report; and for recommending to the Supervisory Board the choice of independent auditors. The Audit Committee is also required to monitor the effectiveness of the enterprise-wide internal audit system and the risk management system. The Working Committee oversees borrowing operations to fund the export financing scheme; lending under the export financing scheme; lending under section 3 of the internal rules of procedure (related debt rescheduling facilities and purchase of accounts receivable); and the use of the amounts in the interest stabilisation account. No nomination committee or remuneration committee was formed. The functions concerned are performed by the chair group (the Supervisory Board Chairman and Deputy Chairman). The chair group met four times in 2010.
Openness and transparency in communications with its shareholders and other stakeholders is particularly important to OeKB. This priority was upheld in 2010 by the Executive Board and the Investor Relations and Public Relations departments. In addition to other communication channels, up-to-date information on the Group and its business segments is always available on the OeKB website at www.oekb.at. According to the rules 4 and 5 of the Austrian Code of Corporate Governance, the motions submitted to the Annual General Meeting and all documents including shareholder motions and countermotions, as well as the candidates nominated for election to the Supervisory Board, should ordinarily be published on the website. However, OeKB considers such publication to be inappropriate, as this information is reserved for shareholders. Therefore only shareholders may view these documents and the right to confidentiality of shareholders that submit motions must be respected. The company financial statements, company management report, consolidated financial statements and Group management report were audited by KPMG Austria GmbH Wirtschaftsprfungs- und Steuerberatungsgesellschaft, the auditor appointed by the Annual General Meeting. The independent auditors report is found in section IV., Auditors Report.
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Annual Report 2010
General information
4 Supervisory bodies
Supervisory Board
Erich Hampel (born 1951), Vienna

Term of office: 1 January 2010 to AGM 2011 Chairman
Heimo Penker (born 1947) Term of office: 20 May 2005 to AGM 2011 Chief Executive Officer, BKS Bank AG, Klagenfurt Angelo Rizzuti (born 1961)
Term of office: 21 May 2003 to AGM 2013 UniCredit Bank Austria AG, Vienna
Walter Rothensteiner (born 1953) Term of office: 2 August 1995 to AGM 2011 First Vice-Chairman Chief Executive Officer, Raiffeisen Zentralbank sterreich Aktiengesellschaft, Vienna Franz Hochstrasser (born 1963) Term of office: 19 May 2009 to AGM 2011 Second Vice-Chairman Deputy Chief Executive Officer, Erste Group Bank AG, Vienna Helmut Bernkopf (born 1967)
Term of office: 19 May 2009 to AGM 2014 Member of the Executive Board, UniCredit Bank Austria AG, Vienna
Ludwig Scharinger (born 1942)

Term of office: 18 May 2010 to AGM 2011 Chief Executive Officer, Raiffeisenlandesbank Obersterreich Aktiengesellschaft, Linz
Herbert Stepic (born 1946)

Term of office: 3 April 1992 to AGM 2015 Chief Executive Officer, Raiffeisen Bank International AG, Vienna
Thomas Uher (born 1965) Term of office: 16 May 2007 to AGM 2011 Member of the Executive Board, Erste Bank der oesterreichischen Sparkassen AG, Vienna Gerald Wenzel (born 1950)
Term of office: 18 May 2010 to AGM 2011 Chief Executive Officer, sterreichische Volksbanken-Aktiengesellschaft, Vienna
Peter Hofbauer (born 1964)

Term of office: 19 May 200918 May 2010 UniCredit Bank Austria AG, Vienna
Friedrich Hondl (born 1960) Term of office: 15 December 2009 to AGM 2011 UniCredit Bank Austria AG, Vienna Stephan Koren (born 1957)
Term of office: 20 May 2008 to AGM 2014 Deputy Chief Executive Officer, BAWAG P.S.K. Bank fr Arbeit und Wirtschaft und sterreichische Postsparkasse Aktiengesellschaft, Vienna
Stephan Winkelmeier (born 1967) Term of office: 19 May 20097 June 2010 UniCredit Bank Austria AG, Vienna (until 22 June 2010) Robert Zadrazil (born 1970)
Term of office: 19 May 2009 to AGM 2011 Chief Executive Officer, Schoellerbank Aktiengesellschaft, Vienna
Reinhard Ortner (born 1949), Vienna

Term of office: 12 May 199818 May 2010
Franz Zwickl (born 1953), Vienna

Term of office: 20 May 1999 to AGM 2011
AGM = Annual General Meeting
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Annual Report 2010
General information
Employee Representatives:
Government Commissioners
under section 27 of the Articles of Association (supervision of bond cover pool)
Martin Krull (born 1976)

Since 14 March 2002 Chairman of the Staff Council
Anish Gupta (born 1966) Since 14 March 2006 Vice-Chairman of the Staff Council Alexandra Griebl (born 1977)
Since 14 March 2010
Johannes Ranftl (born 1948) Commissioner [since 1 December 1996] Ministerialrat, Austrian Ministry of Finance Edith Wanger (born 1955)
Deputy Commissioner [since 1 June 1997] Amtsdirektorin, Austrian Ministry of Finance
Christian Leicher (born 1968)

Since 7 July 2009
Independent auditor
(for the 2010 financial year)
Claudia Richter (born 1964)

Since 11 July 2002
Erna Scheriau (born 1959) Since 1 April 2001 Otto Schrodt (born 1949)
Since 14 March 1998
KPMG Austria GmbH Wirtschaftsprfungs- und Steuerberatungsgesellschaft, Vienna

Certified Public Accountants The auditor within the meaning of the Austrian Stock Corporation
Ulrike Zabini (born 1959)

Since 14 March 1998
Act (Aktiengesetz) also acts as the bank auditor for the purposes of the Austrian Banking Act (Bankwesengesetz).
The term of office for employee representatives ends on 13 March 2014.
Legal Advisers Government Commissioners

under section 76 Austrian Banking Act
Thomas Wieser (born 1954) Commissioner [since 1 January 2011] Austrian Ministry of Finance Alfred Lejsek (born 1959) Commissioner [1 September 2003 until 1 January 2011] Austrian Ministry of Finance Johann Kinast (born 1963) Deputy Commissioner [since 1 March 2006] Austrian Ministry of Finance
The above government commissioners are also representatives of the Austrian Minister of Finance under section 6 1981 Export Financing Guarantees Act.
Pch Krassnigg Rechtsanwlte GmbH, Vienna Peter Pch, Lawyer, Legal Adviser
(Information current as of 28 February 2011)
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Annual Report 2010
General information
5 Organisational structure of OeKB

Executive Board
Johannes Attems
(born 5 October 1947)
Rudolf Scholten
(born 3 November 1955)
Member of the Executive Board [since 1 June 1988] Member of the Executive Board [since 1 May 1997]
Bank and Business Information EDP Systems and Organisation International Finance Capital Market Services Personnel Department Bond Market and Notification Office under the Capital Markets Act
Controlling, Reporting and Payments Export Guarantees Claims Management Export Guarantees International Relations and Services Export Guarantees Project Underwriting Credit Department Organisation, Construction, Environmental Issues and Security Project and Environmental Analyses Accounting Guarantees for Export Acceptance Credits
The Executive Board is collectively responsible for

Internal Audit/Group Internal Audit Risk Controlling Department Secretariat of the Executive Board/Public Relations Legal Affairs
The employment contract of Johannes Attems runs until 31 December 2014; that of Rudolf Scholten runs until 30 April 2012.
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Annual Report 2010
General information
Senior officers
Bank and Business Information Capital Market Services
Angle Eickhoff, Head of Department Jutta Leitner, Deputy Head of Department

Controlling, Reporting and Payments
Robert Anderl, Head of Department Michael Meier, Deputy Head of Department

Export Guarantees Claims Management
Georg Zinner, Head of Department Christian Krbler, Deputy Head of Department Wolfgang Aubrunner Peter Felsinger Norbert Leitgeb Gerhard Mayer
Credit Department
Christine Dangl, Head of Department Peter Gaspari, Deputy Head of Department Norbert Wokusch, Deputy Head of Department
Export Guarantees International Relations and Services
Dieter Nell, Head of Department Harald Klee, Deputy Head of Department Ilse Czermak Hans-Rainer Miehl
Public Relations
Peter Gumpinger
Organisation, Construction, Environmental Issues and Security
Sylvia Doritsch-Isepp, Head of Department Gerhard Kinzelberger, Deputy Head of Department Heidemarie Ptacnik
Export Guarantees Project Underwriting
Eveline Balogh, Head of Department Thomas Bammer, Deputy Head of Department

Personnel Department
Ferdinand Schipfer, Head of Department Erwin Marchhart, Deputy Head of Department Karin Roitner, Deputy Head of Department Johannes Pflgl
EDP Systems and Organisation
Josef Feldhofer, Head of Department Martina Ganzera-Veraszto, Deputy Head of Department

Project and Environmental Analyses
Lech Ledchowski, Head of Department Franz Macsek, Deputy Head of Department Manfred Heppe Michael Nedved
International Finance
Werner Schmied, Head of Department Karl Lenauer, Deputy Head of Department

Accounting
Angelika Sommer-Hemetsberger, Head of Department Markus Schmidt, Deputy Head of Department Gerhard Polterauer
Bond Market and Notification Office under the Capital Markets Act
Waltraut Burghardt, Head of Department Anton Ebner, Deputy Head of Department Anish Gupta Elisabeth Schneider Monika Seitelberger Johannes Skarohlid
Internal Audit/Group Internal Audit
Erich Weiss, Head of Department Maria Kucera, Deputy Head of Department

Risk Controlling
Karl Heinz berlackner, Head of Department and CRO Christoph Schwrzler, Deputy Head of Department
and Deputy CRO
Karl Sterrer, Head of Department Gottfried Stocker, Deputy Head of Department

E-mail: first_name.last_name@oekb.at Telephone: +43 1 531 27-0
Gerda Klaus, Deputy Head of Department

Guarantees for Export Acceptance Credits
Wolfgang Pitsch, Head of Department Ulrike Zabini, Deputy Head of Department
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Annual Report 2010
General information
6 Business holdings
Johannes Attems Rudolf Scholten
sterreichischer Exportfonds GmbH
OeKB Versicherung Aktiengesellschaft
CCP Austria Abwicklungsstelle fr Brsengeschfte GmbH

Wolfgang Aubrunner Ludwig Nieen
Carl de Colle Elisabeth Strassmair
Helmut Altenburger Karolina Offterdinger
Oesterreichische Entwicklungsbank AG
PRISMA KreditversicherungsAktiengesellschaft
Ludwig Mertes Bettina Selden
Wiener Brse AG
Andrea Hagmann Michael Wancata
OeKB Business Services GmbH
OeKB Sdosteuropa Holding Ges.m.b.H.
Budapest Stock Exchange Ltd.
Robert Anderl Thomas Spanel
Helmut Altenburger
The entities shown are those in which OeKB AG holds a direct or indirect ownership interest of at least 50% or of a carrying value of more than EUR 500,000. Pure holding companies are omitted.
Information on investments in other companies and their representation in the accounts is provided in note 28 to the consolidated financial statements.
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Annual Report 2010
Supervisory Board report

In 2010 the Supervisory Board, the Audit Committee and the Working Committee supervised the management and approved its actions, on the basis of the regular reports made by management in regular meetings as well as in writing, and through repeated personal contact. The consolidated financial statements for 2010 and the Group management report presented herein, as well as the 2010 company financial statements and management report, of Oesterreichische Kontrollbank AG were audited by KPMG Austria GmbH Wirtschaftsprfungs- und Steuerberatungsgesellschaft, Vienna. The financial statements received an audit opinion as being in accordance with the legal requirements. The Supervisory Board and its Audit Committee have reviewed the reports presented by the Executive Board on the result of the audit for the 2010 financial year, and the proposal for the appropriation of profit. The final result of this review did not give rise to objections. The Supervisory Board in its meeting on 22 March 2011 approved the company financial statements for 2010, which were thereby adopted, and declared its agreement with the Executive Boards proposal for the appropriation of profit. The Supervisory Board has approved the consolidated financial statements and Group management report. For the excellent work done during the year, the Supervisory Board would like to express its gratitude and appreciation to the Executive Board and every employee of the OeKB Group. Vienna, March 2011
For the Supervisory Board
Erich Hampel
Chairman
17
With Kontroll in its name, what does Oesterreichische Kontrollbank actually control or supervise?
Despite what our name seems to imply, we do not have a supervisory or monitoring role. But we fulfil many functions for the Republic of Austria and the general market that demand special expertise in the export and securities markets. With this in mind, part of our job at OeKB is to ensure day-by-day that we stay on top of our very diverse portfolio of businesses.
Erik Schoinz
Financial Risk Analyst, Risk Controlling
18

19
20
Annual Report 2010
II. Group management report for 2010

1 Business performance and financial and economic situation
Consolidated financial statements Operating profit 2010
This annual report includes the consolidated financial statements of Oesterreichische Kontrollbank AG (OeKB AG) and its subsidiaries, prepared in accordance with International Financial Reporting Standards (IFRS). The companies of the OeKB Group and their activities are profiled in this management report. The OeKB Groups operations in 2010 continued to focus on the business segments of Export Services, Capital Market Services and Information Services, as well as the private credit insurance business. The developments and performance in these specific business segments are presented beginning in section 2 of this report.
Austrian companies exports rose by 16% compared with 2009. However, the amount of funding provided under OeKBs Export Financing Scheme did not keep pace with this growth. With loans of EUR 2.9 billion disbursed and repayments of EUR 4.9 billion received, net export loans outstanding decreased by EUR 2 billion. Similarly, the total outstanding balance of loans by OeKB subsidiary Exportfonds to small and medium-sized businesses declined slightly from EUR 804 million in 2009 to EUR 793 million. Only the amount of business done by OeEB, the development bank, grew in 2010. The reduced lending and continuing low interest rates were reflected in the net interest income, which at EUR 101.0 million in 2010 was significantly less than the year-earlier level of EUR 107.3 million. A positive effect came from the equity-accounted credit insurance group, which, after a business-cycleinduced loss in the prior year, saw its earnings improve significantly in 2010. Net fee and commission income rose substantially, reflecting higher fee and commission income (EUR 57.9 million, versus EUR 56.5 million in 2009) particularly from the processing of export guarantees and from capital market services combined with lower fee and commission expense (EUR 6.7 million, versus EUR 10.5 million in the prior year). Administrative expenses, at EUR 80.1 million, were up by EUR 3.2 million from one year earlier. The increase was caused mainly by higher staff costs. Thus, in 2010 the Group had an average of 396 employees in terms of full-time equivalents (2009: 385). Group operating profit in 2010 was EUR 79.3 million, a reduction of EUR 5.9 million from 2009 (EUR 85.2 million) driven by the effects cited above.
2009 financial statements
The 2009 financial statements were taken up at the 64th Annual General Meeting of the shareholders of Oesterreichische Kontrollbank AG on 18 May 2010; the resulting publications appeared on 21 May 2010 in the Official Gazette of Wiener Zeitung (number 97). The company and consolidated financial statements for 2009 and the associated documents were filed by the Executive Board on 14 June 2010 with the Vienna Commercial Court under Company Register Number FN 85749 b, in accordance with sections 277 and 280 of the Austrian Commercial Code. Under section 221(3) of this legislation, OeKB is classified as a large corporation.
Macro trends in 2010
All in all, financial markets recovered in 2010. This was despite interim concerns over the Eurosystems ability to hold together that were brought on by the government debt crisis in some euro countries, which repeatedly led to nervousness in markets and thus to falling security prices. The European Central Bank mostly maintained its lowinterest policy and the support measures for access to financing, thus contributing to the markets further stabilisation.
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Annual Report 2010
Group management report
Law Suits for Damages 2009/2010
The net gain on financial instruments, at EUR 13.6 million, was well below the prior years figure of EUR 33.8 million, but shows that the markets had quieted down somewhat after the crisis year 2008 and countermovement in 2009. All securities in the Group are measured at fair value through profit or loss.
OeKB was sued by two investors (service of claims on 26 February 2009, for approx. EUR 29,000 and on 30 July 2010, for approx. EUR 2,790,000) for damages in connection with issuing MEL-certificates and infringement of trustee duties. Both law suits can be qualified as test cases. The first law suit was dismissed at the beginning of April 2010 in first and at the end of January 2011 in second instance. It seems unclear whether the plaintiff will lodge appeal at the Supreme Court. The chances of success of the second law suit are seen to be equal with the chances of the first law suit, in particular in view of its evaluation also by external legal advisers.
Profit for the year
Profit before tax in 2010 was EUR 92.9 million (2009: EUR 118.9 million). After tax, the consolidated profit for the year attributable to shareholders of the Groups parent company, OeKB AG, was EUR 72.0 million (2009: EUR 91.5 million). After the compensation of the Supervisory Board and the dividend distribution of EUR 30.0 million to shareholders, consolidated equity calculated in accordance with IFRS grew by EUR 41.8 million to EUR 569.2 million. Consolidated regulatory capital resources of the banking group under section 24 Austrian Banking Act rose from EUR 422.5 million at the end of the prior year to EUR 459.2 million in 2010. On balance, the Groups profitability in 2010 surpassed expectations, thanks in part to the good insurance earnings and the net gain on financial instruments.
Outlook for 2011
In the years ahead, OeKB expects operating earnings to stabilise at about the level of 2010. This is consistent with the return to normal already predicted here a year ago, following the excellent operating profits of 2008 and 2009. As the financial markets grow progressively less volatile, so too should the net gain or loss on financial instruments. OeKB believes that its lending under the Export Financing Scheme will continue to decrease slightly, but that the associated reduction in income will be offset by rising service revenue (especially in Capital Market Services and Export Services).
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Annual Report 2010
Management of Austrian federal government guarantees by OeKB 1
2.1 Key programme features and background
Export guarantees and Austrian foreign investment guarantees
Since 1950, acting as the agent of the Republic of Austria (the Austrian government as represented by the Federal Ministry of Finance), OeKB has been performing the following functions:
Underwriting-related evaluation (including credit assessment) of applications for guarantees under the Export Guarantees Act Issuing and administrative processing of the guarantees on behalf of the Republic of Austria Exercising the rights of the Republic of Austria under the guarantee contracts.
The guarantee system in place is based on the provisions of the Export Guarantees Act and the respective regulation issued by the Federal Minister of Finance. The contractual relations between the Republic of Austria and the guarantee holders are set out in the general terms and conditions (General Business Conditions) for guarantees of the Republic of Austria under the Export Guarantees Act, and in the respective guarantees themselves. Guarantees are issued in compliance with the guidelines, directives and regulations of international agreements of the OECD, the EU and the Berne Union.
Cover for non-marketable risks
In this business segment, OeKB acts on behalf and for the account of the Republic of Austria. The liabilities under the Export Guarantees Act are assumed in the form of guarantees for the due performance of contracts by foreign contracting parties, or through endorsements (guarantees by aval) of bills of exchange used to finance export transactions or outbound foreign direct investment.
OeKB as the agent of the Republic of Austria offers cover for non-marketable risks, focusing on exports of capital goods and Austrian direct investment abroad. In contrast, short-term revolving cover is provided by the private market. In this market segment, two Group subsidiaries, OeKB Versicherung AG and PRISMA Kreditversicherungs-AG, offer export credit insurance.
2.2 Developments and outlook
Product and service developments in 2010
2010 was defined by a slow recovery in global economic activity, with most of the growth coming from emerging markets, particularly in Asia. The situation in Europe was marked by uncertainties over some countries high levels of indebtedness.
In this environment, OeKB provided time-tested support to exporters through its services and flexible cover facilities, with the latter expanded for a number of countries, such as in the South Caucasus and Sub-Saharan Africa.
Detailed statistics and the legal requirements concerning the types of guarantees under the Export Guarantees Act and regarding OeKBs Export Financing Scheme are provided in the OeKB Export Services Annual Review. More information on OeKBs Export Services is available at www.oekb.at.
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Annual Report 2010
Outlook for 2011
As conditions in the private credit insurance market have largely normalised again, the availability of cover for marketable risks from the Austrian government expired at the end of 2010, as did the reinsurance provided for private credit insurers since 2009 for non-marketable risks in difficult markets. As in the previous years, OeKB in 2010 made numerous visits to customers and intensified its communication and presentation activity to further raise companies awareness of the benefits of Austrias export promotion facilities and to help new customers initiate cross-border trade transactions.
In 2011 the economic upturn will continue, although regional uncertainties such as in the euro area will also persist and the recently especially strong growth in Asia will shift into a lower gear. This confronts the Austrian export industry with a serious challenge. In these demanding times, OeKB will remain a source of steadfast support to exporters both through export credits and with guarantees for the financing of business acquisitions and company start-ups. As in 2010, new business will consist primarily of guarantees for export credits and less of support for foreign direct investment by Austrian companies.
2.3 International involvement
International cooperation and the Berne Union
Environmental responsibility
In todays globalised economy, many projects are made possible only by the collaboration of partners from several countries. The dense network of cooperation agreements woven by OeKB with other export credit insurers and financial institutions in recent years facilitates the provision of one-stop insurance and financing for such complex multisourcing projects. Since 1954, OeKB is a member of the London-based Berne Union (the International Union of Credit and Investment Insurers). This global organisation currently comprises 49 export guarantee and investment guarantee institutions from 39 countries, including the Multilateral Investment Guarantee Agency (MIGA). The aims of the Berne Union are the coordination of international trade terms and the extensive sharing of information between members.
Based on the resolutions of the OECD, environmental impacts have since the middle of 2000 been given increased consideration in the evaluation of project applications and supported projects. A revision of the relevant OECD Recommendation from June 2007 is currently under negotiation and is intended to help further improve this set of environmental standards and enhance its compatibility with other aspects of development. In the environmental impact assessment procedure used by OeKB, the environmental soundness of projects is analysed with the goal of identifying weaknesses in terms of impacts on the environment and on people as early as possible, actively exerting influence towards their alleviation and thereby helping to promote environmental awareness in the target countries. The assessment procedure itself and large export projects are published on the OeKB website. They are subject to a peer review within the OECD and are thus open to public scrutiny.
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Annual Report 2010
OECD Guidelines for Multinational Enterprises
OeKB promotes the awareness and application of the OECD Guidelines for Multinational Enterprises. Since 2008, all guarantee holders and beneficiaries of aval endorsements in respect of foreign investment projects are therefore encouraged to become familiar with these guidelines and to observe them to the greatest possible extent in their international activities.
2.4 Business in 2010
Economic situation
Aggregate exposure limit of EUR 50 billion, with utilisation of EUR 38.5 billion
The demand decline in most buyer countries, which had taken a heavy toll on the Austrian export industry in 2009, was partly reversed in 2010: In total last year, Austrian exports rose by about 16% from 2009. At the same time, active foreign direct investment by Austrian entities still remained relatively subdued, but overall, it has probably passed the trough witnessed in 2009. There are signs of a continuing positive trend for 2011, although less pronounced than in the year under review. With this backdrop, the number of guarantee and aval holders serviced in the export guarantees scheme at the end of the year under review was about 1,300. OeKB is also in ongoing contact with prospective exporters and has a continually growing number of direct contacts with potential outbound foreign direct investors: Increasingly, end-buyers do not decide on their suppliers until after they have found attractive financing options for their projects. The advisory activity of the customer service representatives is supplemented by a wide range of brochures and other written information about the existing export promotion facilities and improvements or additions to these products.
With an exposure limit of EUR 50.0 billion (the limit on the aggregate liability) under the Export Guarantees Act, actual exposure at 31 December 2010 from outstanding guarantees amounted to EUR 38.5 billion, representing 77.0% utilisation. This compared with actual exposure of EUR 40.7 billion or 81.3% one year earlier. Utilisation thus eased by EUR 2.2 billion or 5.3%. The outstanding guarantee with the longest term covers a credit period ending in the year 2043.
EUR 3.9 billion of new guarantees issued
In the year under review, 948 new guarantees (guarantees, aval endorsements, and guarantees of OeEB) with a total value of EUR 3.9 billion were issued by the Republic of Austria under the Export Guarantees Act, with the credit management aspects and administrative processing provided by OeKB as its agent (2009: 858 new guarantees with a total value of EUR 5.2 billion). The amounts at 31 December 2010 stated above included debt rescheduling guarantees for 16 countries in a total amount of EUR 673 million (2009: debt rescheduling guarantees totalled EUR 816 million, and new guarantee contracts issued included EUR 8 million of rescheduling guarantees).
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Annual Report 2010
2008
2009
2010
Guarantees under the Export Guarantees Act

Aggregate guarantee exposure limit, at 31 December Aggregate guarantee exposure (i.e., limit utilisation), at 31 December Number of holders of outstanding guarantees (rounded) Number of guarantees in place Number of new guarantee contracts issued New guarantee contracts issued New conditional commitments (i.e., new guarantee offers for prospective underlying transactions) Guaranteed export sales (estimate) Guaranteed exports in % of total Austrian exports Total Austrian exports (excluding services) Premium and interest income Gross claims paid by the Guarantor Recoveries on claims paid Amounts written off as unrecoverable Of which write-offs with Maastricht relevance Guarantors recoverable claims, at 31 December Net interest rate relief granted
Sources:
1
50,000 44,446 1,400 3,995 1,032 12,063 868 3,914 4 117,525 1 242 380 262 48 48 916 23
50,000 40,650 1,400 3,833 858 5,160 1,618 3,644 4 93,739 1 89 333 353 32 32 864
50,000 38,508 1,300 3,859 948 3,869 1,593 3,666 3 108,740 2 190 116 36 92 92 852
Statistics Austria
December 2010 forecast by WIFO, the Austrian Institute of Economic Research
Guarantees covered 3% of Austrias total exports
Total Austrian exports in 2010 reached approximately EUR 108.7 billion (2009: EUR 93.7 billion). Including the new guarantees issued in 2010 (and excluding avals and rescheduling guarantees), the guarantee system under the Export Guarantees Act covered about EUR 3.7 billion, or 3%, of Austrian exports (2009: EUR 3.6 billion or 4%).
Claim payments and premium income
reached the following levels at the end of 2010: premium and interest income of EUR 5.7 billion, claim payments of EUR 7.6 billion, recoveries of EUR 3.3 billion and charge-offs of EUR 3.4 billion. At 31 December 2010, receivables from claims paid by the Republic of Austria under guarantees managed by OeKB were EUR 0.9 billion; collection activities are expected to lead to further recoveries on these outstandings. At the same date, claims authorised but not yet paid amounted to EUR 4 million. The amount of claims paid by the Republic of Austria under guarantees pursuant to the Export Guarantees Act must be viewed in the context of the total cumulative volume of guarantee contracts issued. From the inception of the guarantee programme in 1950 to the end of 2010, the value of guarantees issued was EUR 186.3 billion. In this cumulative total, revolving guarantees are only included at their nominal amounts. During these 61 years, cumulative charge-
Premium and interest income in 2010 totalled EUR 190 million. Gross claims paid (including claim payments under guarantees for debt rescheduling agreements) by the guarantor, the Republic of Austria, amounted to EUR 116 million, while recoveries were EUR 36 million. EUR 92 million was charged off by the Republic of Austria in 2010 as unrecoverable or under debt foregiveness. The cumulative totals since the establishment of the export guarantee system in 1950
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Annual Report 2010
offs by the Guarantor and (since 1989) debt relief through interest reductions that had to be granted under international agreements totalled a combined EUR 4.6 billion, or 2.5% of the cumulative amount of guarantee contracts issued. In setting the premium levels charged to customers for the guarantees, the Guarantor does not seek to realise a profit but to cover the cost of the guarantee
system in the long term. Expenses for interest reduction in connection with the concessional rescheduling of debts under international agreements have a sustained effect on the guarantee programmes net surplus. In 2010 the positive trend of the past several years continued and guarantee programme income exceeded net costs by EUR 115 million.
2.5 Guarantees under the Corporate Liquidity Support Act (ULSG)
The strain in financial markets and the economic situation 2009 had caused even healthy, large Austrian companies to experience unexpected shortages of liquidity. To help boost the Austrian economy, the Corporate Liquidity Support Act was passed. The Austrian government has given OeKB the mandate to administer the guarantees under this Act on the basis of Austrian Federal Law Gazette I no. 78/2009, to provide the credit-related processing, issue the guarantee contracts and protect the associated rights of the Republic of Austria. The contractual relations between the Republic of Austria and the guarantee holders are governed by the Federal Ministry of Finances Detailed Provisions on Guarantees under section 4(8) Corporate Liquidity Support Act and by the guarantee contracts involved. When issuing guarantees, due regard was given to the respective basis in Community law, especially the communication from the Commission titled Temporary Community Framework for State Aid Measures to Support Access to Finance in the Current Financial and Economic Crisis. The Austrian enabling legislation expired on 31 December 2010 and thus applications for such guarantees could no longer be accepted after that date. The existing guarantees will expire by the end of 2015 and will be supported with administrative services until then.
The object of the guarantees are banks loan receivables from credit agreements with companies. Borrowers eligible for such guaranteed loans were any companies domiciled or having a business location in Austria that did not meet the criteria of a small or medium-sized enterprise (SME) as defined by the European Commission. Credit facilities eligible for the guarantees were:
Investment loans for capital investment in Austrian locations Loans obtained to service bonds or to meet contractual repayment obligations on existing loans (follow-up financing) Operating loans.
The guarantees covered from 30% to 70% of the loan amount outstanding. The maximum guaranteed amount per company or group of related companies was limited to EUR 300 million; the maximum term is five years. In 2010, the Austrian Minister of Finance approved guarantees totalling EUR 847 million on credit facilities representing total lending commitments of EUR 1,509 million. In total since the inception of the programme, the guarantees issued under the Corporate Liquidity Support Act reached EUR 1,310 million by the end of 2010, covering credit facilities of EUR 2,248 million.
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Annual Report 2010
Region or country group
Exports
Export guarantees
Export Financing Scheme
Exports, export guarantees and export financing scheme of OeKB, by region 1

Exports in 2010
Guarantee contracts issued in 2010
Guar. outstanding at 31 Dec. 2010
At 31 December 2010 Commitments Disbursements
EUR million Europe (incl. Turkey, CIS) EU North America Latin America Asia Australia and Oceania Africa Comprehensive policies (CP) Subtotal Aval endorsements (AE) Guarantees issued for OeEB Total Of which (excl. CP, AE, OeEB): OECD Non-European developing countries OPEC 108,740 2
EUR million 732 200 10 48 945 2 130 1,867 1,870 132
% 18.9 5.2 0.3 1.2 24.4 0.1 3.4 48.3 48.3 3.4 100.0 4.4 29.0 3.6
EUR million 9,785 1,167 13 367 4,841 9 726 2,487 18,228 20,039 241 38,508 1,353 5,932 1,822
% 25.4 3.0 0.0 1.0 12.6 0.0 1.9 6.5 47.4 52.0 0.6 100.0 3.5 15.4 4.7
EUR million 6,872 815 212 2,805 1 535 689 11,114 21,829 32,943 1,213 3,537 1,133
% 20.9 2.5 0.6 8.5 0.0 1.6 2.1 33.7 66.3 100.0 3.7 10.7 3.4
EUR million 6,655 734 112 2,641 1 484 365 10,258 19,171 29,429 1,089 3,238 1,133
% 22.6 2.5 0.4 9.0 0.0 1.6 1.3 34.9 65.1 100.0 3.7 11.0 3.8
100.0
3,869 169 1,123 139
Exports in 2009 3 EUR million Europe (incl. Turkey, CIS) EU North America Latin America Asia Australia and Oceania Africa Comprehensive policies (CP) Subtotal Aval endorsements (AE) Guarantees issued for OeEB Total Of which (excl. CP, AE, OeEB): OECD Non-European developing countries OPEC
1
Guarantee contracts issued in 2009 EUR million 923 110 4 120 967 128 1,200 3,342 1,766 52 5,160 254 1,215 217 % 17.9 2.1 0.1 2.3 18.7 2.5 23.3 64.8 34.2 1.0 100.0 4.9 23.5 4.2
Guar. outstanding at 31 Dec. 2009 EUR million 10,540 1,171 6 392 4,996 9 780 2,487 19,210 21,331 109 40,650 1,680 6,167 2,033 % 25.9 2.9 0.0 1.0 12.3 0.0 1.9 6.1 47.2 52.5 0.3 100.0 4.1 15.2 5.0
Commitments EUR million 7,366 832 0 205 2,886 641 750 11,848 21,955 33,803 1,171 3,732 1,279 % 21.8 2.5 0.0 0.6 8.6 1.9 2.2 35.1 64.9 100.0 3.5 11.1 3.8
At 31 December 2009 Disbursements EUR million 7,097 768 0 128 2,683 624 410 10,942 20,459 31,401 1,008 3,435 1,278 % 22.6 2.4 0.0 0.4 8.5 2.0 1.3 34.8 65.2 100.0 3.2 10.9 4.1
% 82.6 71.0 6.5 8.6 0.7 1.5
77,434 66,527 6,109 8,099 672 1,374
93,739 74,484 5,856 2,018
100.0 79.5 6.2 2.2
The amounts shown for guarantees and financing include only contracts issued, not conditional commitments. Sources: 2 December 2010 forecast by WIFO, the Austrian Institute of Economic Research 3 Statistics Austria
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Annual Report 2010
3 OeKB Export Financing Scheme 1

3.1 Key programme features and background
Export Financing Scheme in place since 1960
Since 1960 OeKB has operated a programme to finance exports of goods and services, largely on a medium- and long-term basis, with special emphasis on exports of Austrian capital goods. Known as the Export Financing Scheme, this programme serves to provide funding facilities to banks which in turn extend credit to Austrian exporters or investors and foreign importers (supplier and buyer credits for exports, financing for Austrian companies investments in foreign countries, and export acceptance credits). The export financing scheme is also used for funding the direct lending by OeKB for the same purposes. The 1995 Amendment to the Export Guarantees Act allows guarantees to be issued for untied credits.
They must, however, meet the creditworthiness criteria of OeKB, fulfil the legal requirements regarding the transactions to be financed and satisfy OeKBs standard conditions for uniform financing procedures. The latter applies particularly to collateral management.
International environment
Lending under the export financing scheme is conducted in adherence to the applicable rules and guidelines established by international agreements of the OECD, the EU and the Berne Union. The maximum repayment term of commercial export credits that fall within the scope of the OECD Arrangement on Officially Supported Export Credits is generally 10 years. Longer maximum terms are possible for conventional power plants (maximum of 12 years), project finance (maximum of 14 years) and renewable energy and water projects (maximum of 18 years).
Requirements
The credits to banks require a guarantee for the transaction or right underlying the financing. The guarantee must conform to the provisions of the 1981 Export Financing Guarantees Act and be of one of the following types:
A guarantee by the Republic of Austria under the Export Guarantees Act A guarantee by a credit insurer complying with the same Act A guarantee by Austria Wirtschaftsservice Gesellschaft mit beschrnkter Haftung A guarantee by an international organisation.
Financing on commercial terms
In addition, both the rights arising from the guarantees and the underlying receivables (export or other receivables) typically must be assigned as security. The extension of funding to banks through OeKBs Export Financing Scheme represents an open system available to domestic and foreign credit institutions.
The financing for banks supplier and buyer credits and investment loans is extended at variable and fixed interest rates. The floating rate is determined by OeKB for periods of three months at a time and is based on OeKBs own average cost of funding itself in the market. In the case of non-revolving loans, the floating-rate portion of the credit is repaid first; the fixed interest rate is applied to the longer-term portion of the facility (base financing).
Detailed statistics and the legal requirements concerning the types of guarantees under the Export Guarantees Act and regarding OeKBs Export Financing Scheme are provided in the OeKB Export Services Annual Review. More information on OeKBs Export Services is available at www.oekb.at.
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Annual Report 2010
Developments in products and services in 2010/2011
Since the middle of 2009, OeKB also offers pure floating-rate financing of supplier and buyer credits and investments, based on 3-month EURIBOR. Credit to banks for the funding of revolving credit facilities, and of export acceptance credits under the Kontrollbank Credit Line, or KCL (in German: KontrollbankRefinanzierungsrahmen or KRR), is extended at special floating interest rates.
As mentioned above, since December 2009, the existing foreign currency funding options for banks lending to suppliers are rounded out by the availability of fixed-rate foreign currency funding facilities on a CIRR basis. In a pilot phase running to the end of 2011, foreign currency loans can under certain conditions be made available to banks for the financing of supplier and buyer credits that are covered by credit insurance in the matching currency. In October 2010 the list of countries eligible to receive soft loans was expanded. Based on the set of countries authorised under the OECD Arrangements and the soft-loan policy of the Federal Ministry of Finance, an additional 18 recipient countries for Austrian soft-loan financing are thus available to the Austrian export industry. Also since the fourth quarter of 2010, contracts involving purely or largely services can under certain conditions be financed using soft loans. In the soft loan project preparatory programme, seven new applications were received in 2010. Four applications were presented to the Federal Ministry of Finance for approval. Currently, five project preparation studies are in progress and four other studies have been completed. In 2010, to promote and expand financial cooperation, master agreements were concluded with Cape Verde, Vietnam and Syria and extended with Tunisia. Negotiations to reach such agreements were opened with Jordan and Mongolia.
Interest rates for commercial lending to banks
The current interest rates of the Export Financing Scheme are published via Reuters and can also be viewed on the Internet at www.oekb.at.
Concessional financing for certain projects
Subject to the relevant provisions of the OECD Arrangement, specific projects may be financed on concessional terms upon approval by the export financing committee. The eligibility criteria for soft loans and the financing terms can be found online at www.oekb.at.
Foreign currency financing
As an additional way to promote a strong export sector, foreign currency financing is in some cases available: Export financing with credit periods of more than two years can, subject to certain conditions, also be provided in foreign currency at variable or fixed rates. Supplementing this, fixed-interest foreign currency financing for supplier credits is offered on a CIRR basis.
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Annual Report 2010
The figures in the next table show the utilisation of OeKBs Export Financing Scheme by the export sector via banks. At the end of 2010, the programme was in use by 68 banks and served approximately 1,300 exporters through about 3,600 export credits. In the export financing scheme at the end of the year, there were outstanding total lending commitments (including conditional commitments) of EUR 33,246 million (2009: EUR 34,075 million). Of this total, EUR 29,429 million or 88.5% was drawn (2009: EUR 31,401 million or 92.2%).
The net change from one year earlier was thus a reduction of EUR 829 million or 2.4% in total commitments (including conditional commitments) and a reduction of EUR 1,972 million or 6.3% in disbursements. The outstanding loan agreement with the longest term expires in the year 2043. For 2011, depending on the business trend, credit disbursements in the Export Financing Scheme can be expected to decrease by approximately between EUR 1.5 billion and EUR 3 billion.
2008
2009
2010
OeKB Export Financing Scheme

Number of banks/exporters involved (rounded) Number of export financing contracts outstanding (rounded) Total lending commitments (i.e., financing contracts and conditional commitments) outstanding at 31 December Financing contracts outstanding at 31 December Of which disbursements outstanding New commitments issued New conditional lending commitments issued Loan funds disbursed Repayments received Increase/(decrease) in net loans outstanding Total funds used under the Export Financing Scheme Limit on aggregate guarantee exposure under 1981 Export Financing Guarantees Act Utilisation of the guarantee exposure limit at 31 December Total new guarantees issued
45,000 38,486 17,108 45,000 33,745 8,230 45,000 31,658 6,294 39,143 38,952 36,803 12,225 143 12,054 4,788 +7,266 45,499 34,075 33,803 31,401 4,971 178 4,441 9,843 (5,402) 41,965 33,246 32,943 29,429 4,413 257 2,924 4,896 (1,972) 26,787 71/1,500 4,000 70/1,400 3,700 68/1,300 3,600
Since the OeKB-operated export financing scheme came into existence 51 years ago, a total of EUR 125.6 billion of credit has been disbursed to the Austrian export industry and banking sector, and credit repayments of EUR 96.2 billion have been received. The total of all funds used under the export financing scheme in 2010 was EUR 26.8 billion. OeKB as an export credit agency is thus a major issuer of debt in international financial markets. Its bonds are rated AAA by Standard & Poors and Aaa by Moodys.
The respective ratings for short-term debt are A-1+ and P-1. OeKB raises funding for the export financing programme through borrowing operations in domestic and international financial markets. The borrowing policy is discussed and agreed on an ongoing basis with the Guarantor under the 1981 Export Financing Guarantees Act; the Guarantor is the Republic of Austria as represented by the Federal Ministry of Finance.
31
32
How does OeKB fund itself?

To finance cross-border project business and direct investment, we raise funding in national and international money and bond markets. Our reputation as a top-quality borrower with excellent market access goes back decades. Helping make this easy access possible are our thorough knowledge of the market, close communication with investors, and transactions that are executed smoothly from the collection of the proceeds to redemption.
Bettina Hanke
Manager, International Finance

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Annual Report 2010
OeKB applies modern portfolio management techniques as decision support to help guide its funding policy. Derivative financial instruments are used to
manage costs and risks. The risk management and valuation systems employed by OeKB satisfy international standards.
3.3 Guarantees of the Republic of Austria under the 1981 Export Financing Guarantees Act
Aggregate exposure limit of EUR 45 billion and utilisation of EUR 31.7 billion
The 1981 Export Financing Guarantees Act authorises the Federal Minister of Finance to issue guarantees to creditors in borrowing transactions of OeKB under the Export Financing Scheme. The Federal Minister of Finance is also authorised to guarantee repayment to OeKB of possible foreign exchange losses resulting from borrowing transactions in foreign currencies. The aggregate exposure limit under these guarantees (i.e., the limit on the total combined liability at any given time) is EUR 45 billion. For this coverage, OeKB pays a guarantee premium to the Ministry of Finance.
In 2010 the Republic of Austria gave guarantees under the Export Financing Guarantees Act for a total principal amount of EUR 6.3 billion of funds borrowed by OeKB. At the reporting date of 31 December 2010, EUR 31.7 billion of the EUR 45.0 billion aggregate exposure limit was utilised by guarantees covering principal amounts and exchange rate risks, compared with utilisation of EUR 33.7 billion at the end of the previous year.
Transactions of Oesterreichische Kontrollbank AG in 2010

USD 1,250,000,000
1.750% Guaranteed Global Notes due 2013

USD 1,000,000,000
1.750% Guaranteed Global Notes due 2015
unconditionally and irrevocably guaranteed by the Republic of Austria
unconditionally and irrevocably guaranteed by the Republic of Austria
Goldman Sachs International J.P. Morgan Securities Ltd. UBS Limited
Deutsche Bank AG, London Branch Goldman Sachs International HSBC Bank plc
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Annual Report 2010
4 sterreichischer Exportfonds GmbH

sterreichischer Exportfonds (Exportfonds) provides export financing for small- and medium-sized companies via their own bank. Disbursed loans outstanding at 31 December 2010 amounted to EUR 793 million, or about 1.4% less than one year earlier. Currently it serves approximately 1,600 exporters, with an average outstanding loan balance of EUR 505,000. In 2010, Exportfonds approved loans to 87 new customers. Since the beginning of 2005, Wirtschaftskammer sterreich (the Austrian chamber of commerce) holds 30% of the share capital of Exportfonds; the other 70% has been held by OeKB AG since 1998. The company is managed by Carl de Colle and (since 1 January 2011) Elisabeth Strassmair. Excluding the management, Exportfonds had 13 employees as of 31 December 2010.
5 Capital market
From its very beginnings, OeKB has contributed in many ways to the growth and increasing sophistication of the Austrian securities marketplace, playing a crucial role in the establishment and progressive development of the domestic capital market, especially for bonds. This has always been done in the service of the capital market participants, while acting in agreement with the Vienna Stock Exchange and in coordination with the Federal Ministry of Finance and Oesterreichische Nationalbank, the Austrian central bank.
Added to the continual growth in domestic settlement volume was an upward jump in cross-border settlement transactions in the fourth quarter, which, however, stemmed from temporary causes.
In equities, the domestic settlement turnover declined in 2010 for the second year in succession, whereas equity assets under custody remained steady. On the fixed income side, both settlement volume and assets under custody increased.
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Annual Report 2010
5.2 Issuer Services
Issuer Portal and IssuerInformationCenter.Austria
As part of the transposition of the EU Transparency Directive 2004/109/EC into national law (Stock Exchange Act Amendment of 2007), OeKB was asked to set up a system for the central storage of regulated issuer information in Austria. To do so, OeKB developed the Issuer Portal for issuers whose securities are listed on a regulated market. The core functions of the Issuer Portal include the electronic receipt, storage, and provision of access to regulatory information through IssuerInformationCenter.Austria. As well, at the issuers request, the Portal passes regulated and voluntary information on to specified recipients on an automated basis (for instance, the Vienna Stock Exchange and the Austrian Financial Market Authority). In 2010, a total of 152 issuers used the Portal and sent about 3,300 notifications. IssuerInformationCenter.Austria (http://issuerinfo.oekb.at) is a centralised Internet platform for required and voluntary disclosures by issuers to investors in Austria and other countries. It is accessible free of charge to the public and to market participants.
On the day of the general meeting itself, OeKB (working in partnership with the worldwide leader in AGM services) offers straight through processing of the data from the registration process, advanced vote counting technology, and a backoffice online chat facility with database management. All features and components of the service are scaleable and modular, and are tailored to the size and requirements of the particular AGM. With the creation of its AGM services business in 2009, OeKB seeks to provide issuers, banks, proxies and other capital market participants involved in AGM processes with infrastructure solutions that are efficient, customised and future proof.
Principal paying agent
As a principal paying agent, OeKB was responsible for 419 classes of securities of Austrian issuers in 2010. OeKB acts in this capacity for the payment of principal and interest on domestic bond issues of the Republic of Austria. It also handled the redemptions of 51 other bond issues that had already matured. Additionally, since 1986 OeKB also sets the coupon for floating-rate Austrian Treasury Bills (ATB). Since 1995 it also determines their issue price. For these securities, OeKB is a fiduciary and the principal paying agent. Since as long ago as 1988, it acts as the custodian for the money market treasury bills and handles the interest and principal payments. Market participants made increasing use of the ancillary securities support services in the year under review.
AGM Services
In the year under review, OeKB firmly established itself as a full-service provider for the processes involved in the preparation and execution of annual general meetings. Large, intermediate and small AGMs of companies in various industries were conducted successfully and smoothly. OeKB offers a breadth of AGM outsourcing services that is unprecedented in the Austrian market. It provides key services beginning well before the physical meeting, such as participant registration and the collection of custody receipts, proxies and instructions, including their entry in the system and production of the participant registry.
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Annual Report 2010
MERCUR
OeKB has the mandate from the Federal Ministry of Justice for managing and publishing MERCUR, a gazette for information under the Act on the
Cancellation of Lost or Stolen Securities (Kraftloserklrungsgesetz). In 2010 this involved the management of 298 securities classes.
5.3 Organisation and administration of domestic bond issues
Austrian federal government bonds issued in 2010 Nominal value in EUR thousand 3.200% 3.400% 4.850% Bundesanleihe 2010-2017/1/144A First reopening Bundesanleihe 2009-2014/1/144A Seventh reopening Bundesanleihe 20092026/2/144A Third reopening Fourth reopening Fifth reopening Bundesanleihe 2008-2019/1/144A Eighth reopening Bundesanleihe 20072037/1/144A Sixth reopening Seventh reopening Bundesanleihe 20062021/1/144A Sixth reopening Seventh reopening Eighth reopening Bundesanleihe 2005-2020/1/144A Sixth reopening Seventh reopening Eighth reopening Ninth reopening Bundesanleihe 2005-2015/2/144A Seventh reopening Eighth reopening Ninth reopening Bundesanleihe 2003-2018/1/144A Seventh reopening Bundesanleihe 1997-2027/6 Eighth reopening 4,000,000 1,366,665 1,320,000 825,000 1,118,672 789,142 1,335,473 983,198 660,000
OeKB is the agent for the issuance of bonds of the Republic of Austria at auction. The bond auctions are conducted through ADAS (Austrian Direct Auction System), the automated electronic auction system developed by OeKB. At the beginning of 2010, the Austrian Federal Financing Agency indicated that its planned issuance of euro-denominated government bonds for the year was EUR 21 billion to EUR 25 billion. In fact, as a result of the lower financing requirement, federal government bonds of EUR 21.3 billion were actually issued. Of this total, EUR 17 billion was issued in ten auctions and EUR 4.3 billion was placed through syndicates from January to March. For 2011 the Federal Financing Agency estimates the issuance of euro government bonds at EUR 16 billion to EUR 19 billion. As in 2010, monthly auctions are scheduled for 2011.
4.350% 4.150%
3.500%
880,000 935,179 880,000 833,325 785,725 824,610 550,000 884,600 550,000 550,000 935,227 300,000
3.900%
3.500%
4.650% 6.250%
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Annual Report 2010
5.4 Notification office under the Capital Markets Act
In 1992, under the Capital Markets Act, OeKB became Austrias official notification office.
Prospectus repository
Legal information system
The notification office acts as the filing destination and database for prospectuses prepared in compliance with the Capital Markets Act, the Investment Fund Act and Real Estate Investment Fund Act; it also maintains a calendar (required by the Capital Markets Act) of planned new issues of securities and investments. The related reports received are published daily on the Internet and weekly in Kapitalmarktservice, an OeKB bulletin, without stating the names of prospective issuers. In 2010 the notification office processed about 330,000 reports for the new-issue calendar. The repository database currently contains approximately 30,000 prospectuses (including prospectus supplements/amendments) filed under the Capital Markets Act, Investment Fund Act and Real Estate Investment Fund Act.
When the Capital Markets Act entered into force, the Federal Ministry of Finance and OeKB (in its role as the notification office) set up a legal information system to facilitate the application of the Act. Legal opinions on stock exchange and capital markets law obtained from the legal information system continue to be forwarded by the notification office to interested parties, provided that the Ministry of Finance published them in abstract form. The notification office also answers inquiries regarding compliance with the formal disclosure requirements under the Capital Markets Act, Investment Funds Act and Real Estate Investment Funds Act. It supplies copies of the prospectuses filed and informs the Federal Ministry of Finance, the Financial Market Authority and the Austrian central bank of trends observed in the capital market. With the coming into effect of the Amendment to the Stock Exchange Act and Capital Markets Act (Austrian Federal Law Gazette I No. 78/2005), the functions of the notification office were adjusted in line with the requirements of the new legislation on prospectuses (Directive 2003/71/EC) with effect from 10 August 2005.
5.5 Oesterreichische Clearingbank AG
In autumn 2008, OeKB was given responsibility for conducting the business activities of Oesterreichische Clearingbank AG, a newly established institution. In the course of these activities in 2010, auctions were held on 145 days over the platform developed for this purpose. Overall, loans totalling about EUR 2.4 billion were issued in 2010, for terms ranging from 1 to 9 months.
Over the period from November 2008 to December 2010, loans totalling EUR 11.2 billion were issued via the auction platform. Based on the underlying legislation and the current guarantee agreement with the federal government, these liquidity auctions were discontinued from 31 December 2010.
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5.6 Financial Data Services
As part of its key functions in the Austrian capital market, OeKB offers comprehensive financial data services. In addition to master and transaction data on domestic and foreign securities, OeKB calculates and publishes data for domestic and foreign funds, fixed income securities and investment performance results of pension funds.
To enable automated processing of the data on customer systems, OeKB provides customised export files. The export files are made to specification based on a list of desired attributes relating either to individual ISINs or to the customers total portfolio. The customer ordering the data also chooses its format and the transmission medium. Thus, for instance, registered customers can also download master and transaction data from the Internet (www.profitweb.at).
ISIN Services
As the National Numbering Agency (NNA), OeKB on request assigns an International Securities Identification Number (ISIN) to a financial instrument. The ISIN allows each financial instrument to be uniquely identified worldwide, something that is of fundamental importance to all capital market participants. The ISIN consists of the country prefix AT, a nine-character core of digits and letters that can be chosen by the issuer, and a check digit. The ISINs are distributed by OeKB in accordance with ISO standard 6166 and are available at www.profitweb.at in the ISIN directory. At year-end the ISIN services were being used by 1,776 issuers. In 2010 OeKB issued 15,026 ISINs, of which 8,078 were for derivatives traded on the Vienna exchange of the CEE Stock Exchange Group (CEESEG). A total of 25,671 active ISINs were searchable in the ISIN directory at the end of 2010. In 2011, an Internet application for electronic ISIN requests is planned to go live that is to include an XML interface for automated requests.
Price and rate data
For valuation purposes, OeKB provides the following content through data feeds:
Prices of securities traded on the Vienna Stock Exchange (CEESEG) Prices of unlisted Austrian securities Prices of international securities Reference exchange rates of the ECB .
Profitweb
Profitweb is a long-established Internet platform for securities data, offering the following benefits:
Securities master data and transaction data
OeKB maintains databases for Austrian and international securities and other investment vehicles. The data is entered by OeKB after careful research, and its up-to-dateness and accuracy are verified by a standardised quality assurance process. Four hundred and fifty data fields specify every Austrian security. Seven hundred fields are available for foreign issues.
Master and transaction data on 1,117,520 active domestic and foreign financial instruments Price and transaction data, classification data, performance and risk indicators, volumes and portfolios of all Austrian funds and all foreign funds registered for sale in Austria Convenient search functions Customisable analysis/reports, at data field level Charting tool Download options for all analyses and historical data.
As an optional tool, DataQueryEngine enables clients to download data in XML format for specific fields and securities according to their individual needs. Updates can thus be performed several times daily if desired.
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Fund Data Portal
Financial statement data transfer system
This central platform enables fund companies to exchange detailed fund data (particularly on full holdings) in the international, standard FundsXML format on an automated basis and to make the data available to business partners, data vendors, investors and regulators. The main activities in 2010 were marketing efforts to acquire new customer segments, such as pension funds, insurance companies and data vendors.
Bilanz Transfer, a system developed by OeKB, allows accounting firms, acting on behalf of their clients, to transfer the data from balance sheets, income statements, and income and expenditure accounts to banks in standardised XML format. The banks in turn use the system to provide analytical feedback to Austrian accounting firms (reports and ratios). The structure of the data transferred and the electronic transmission technology are based on the data transfer specifications of the Company Register. When the Bilanz Transfer system went live, it was used by Bank Austria and Erste Bank as well as the savings bank sector. In 2010 the list of users grew to include Raiffeisen banks in five Austrian provinces, and Austria Wirtschaftsservice. Further banks are preparing to join in 2011.
Fund Processing Passport
Through the Fund Processing Standardisation Group, the European Fund and Asset Management Association (EFAMA) carefully analysed the efficiency of back office processes. Based on the insights gained, the Fund Processing Passport (FPP) was developed. This document is harmonised across Europe and contains all essential operational information about a given fund. Under contract to the Association of Austrian Investment Companies (VIG), OeKB collects and distributes the Fund Processing Passport data for the Austrian fund companies. This service for investment companies is available via www.profitweb.at and is also accessible through EFAMAs central FPP Portal, in which OeKB acts as one of the five European Primary Providers. At its website www.efama.org, EFAMA offers centralised access to all existing European FPPs. With this FPP Portal, EFAMA intends to move a step closer to its goal of creating an efficient, single European market for investment funds.
Tax data for foreign investment funds
In accordance with the Investment Fund Act, OeKB as the notification office under the Capital Markets Act has responsibility for the centralised collection and publication of the data on capital yield tax amounts (the tax is known in Austria as Kapitalertragsteuer, or KESt) of all foreign investment funds wishing to give their investors the opportunity for single all-in taxation in Austria. To this end, OeKB provides an efficient infrastructure to the fund companies, including the necessary electronic interfaces for collecting the data. OeKB publishes these tax amounts on www.profitweb.at for what are by more than 17,200 ISINs. The information is also available in electronic files. In 2011 the reporting of capital yield tax amounts is changing as a result of changes in legislation. Preparatory work for this was initiated by OeKB in late 2010.
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OeKB Sustainability Fund Index (OeSFX)
A growing number of investors are putting their money into companies whose conduct is particularly ethical in terms of environmental and social responsibility. To achieve the greatest possible diversification of risk, a promising strategy for these investors is to buy environmentally or socially responsible funds. This is often referred to collectively as socially responsible investing (SRI), ethical investing or sustainable investing. With the OeKB Sustainability Fund Index
developed by OeKB, investors can compare the performance of such funds to that of the entire universe of sustainable equity funds registered for sale in Austria. The index is another way in which OeKB practices its lasting commitment to sustainable business. Details on the OeSFX and current prices are available at www.oesfx.at.
6 CentralSecuritiesDepository.Austria and processing of off-exchange securities transactions

CentralSecuritiesDepository.Austria since 1965
Ever since first receiving the mandate in 1965, OeKB has acted as the Austrian central securities depository, known as CSD.Austria (or CentralSecuritiesDepository.Austria). CSD.Austria provides collective custody of securities. A book entry transfer of securities at CSD.Austria eliminates the need to move physical securities. Instructions for securities transfers are generally placed electronically through OeKBs DirectSettlement.Advanced (DS.A) system.
Through collective custody, banks that maintain accounts at CSD.Austria gain the benefits of heightened efficiency and security in the safekeeping and administration of securities. What is more, they save time and costs in their own in-house custody activities. At 31 December 2010, CSD.Austria held 22,398 classes of securities for 167 depositorso (prior year: 20,217 and 156, respectively).
31 December 2009
31 December 2010
Assets under custody by CSD.Austria

Nominal value in EUR thousand 1 Number of units in 1,000 2
1 2
274,768,924 9,741,632
289,721,825 9,801,676
Represents securities quoted in per cent of nominal value; foreign currencies are translated into EUR. Represents securities quoted per unit.
o Subject to approval by CSD.Austria, the following types of institutions may hold custody accounts: credit institutions, registered securities firms, members of a domestic securities exchange, official brokers of the Vienna Stock Exchange, foreign central securities depositories, and securities clearing houses. CSD.Austria may also admit other legal or natural persons and companies as depositors.
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Annual Report 2010
The transactions settled within the DS.A system are classified into three types as follows:
Transactions between two CSD.Austria account holders (Internal transactions) Transactions between a CSD.Austria account holder and a counterparty having an account at
another custodian of CSD.Austria, in a security held at that custodian (External transactions)
Transactions from the Custody Clearing Link (CCL transactions).
Volume of transactions 1 Number of units in 1,000 2 Nominal value in EUR thousand 3
Number of transactions1
Transactions settled by CSD.Austria

Internal Free of payment Versus payment Total in 2010 Total in 2009 External Free of payment Versus payment Total in 2010 Total in 2009 CCL 4 Total in 2010 Total in 2009 Total Free of payment Versus payment Total in 2010 Total in 2009
1 3 4
5,177,829 5,814,048 10,991,877 14,790,006
354,476,554 72,735,458 427,212,012 399,872,697
154,457 670,079 824,536 715,559
290,854 202,896 493,750 293,075
5,897,094 162,346 6,059,440 11,646,902
23,408 39,400 62,808 31,389
637,028 697,210
84,610 89,151
292,119 292,420
5,468,683 6,653,972 12,122,655 15,780,291
360,373,648 72,982,414 433,356,062 411,608,750
177,865 1,001,598 1,179,463 1,039,368
Based on single counting. 2 Represents securities quoted per unit. Represents securities quoted in per cent of nominal value; foreign currencies are translated into EUR. All are versus payment.
The account balances and transaction volumes shown in these tables underline the important role which CSD.Austria, and hence the non-physical transfer of securities, have come to play in Austria. Approximately 90% of the nominal value of Austrian
debt securities, more than 90% of the nominal amount of all listed Austrian equity securities and over 70% of Austrian certificates (the popular structured products known as Zertifikate) are under custody with and serviced by CSD.Austria.
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Settlement finality act
CCL
A decision of Oesterreichische Nationalbank on 9 December 2003 recognised CentralSecuritiesDepository.Austria the CSD established and operated by OeKB as a system for the purposes of the Settlement Finality Act. Through the Settlement Finality Act, Directive 98/26/EC of the European Parliament and Council of 19 May 1998 (the Settlement Finality Directive) was transposed into national law in Austria. The purpose of the Settlement Finality Act is to improve the protection of participants in systems defined under the Act in the event of insolvency of another participant. When this occurs, the status of CSD.Austria as a system under the Settlement Finality Act places the customers of CSD.Austria in the best possible legal position.
CCL (Custody with Clearing Link), a product designed to complement CSD.Austria, allows the Austrian CSDs customers to reap the benefits of direct membership in the Frankfurt Stock Exchange without having to establish their own clearing and settlement infrastructure. The securities bought in Frankfurt are credited to the accounts within CSD.Austria (providing a single point of entry), where they are administered. OeKB is the first central securities depository in Europe to offer such a service. As of the end of 2010, five Austrian members of the Frankfurt Stock Exchange settled their securities trades via OeKBs CCL product. The CCL settlement service is available not only for Xetra Frankfurt transactions but also for trades on all seven German regional exchanges. On these other exchanges, OeKB complements its settlement service by also acting as an execution broker with electronic order routing. To do so, OeKB became a member of all seven trading floor exchanges in Germany. It has thus created the necessary infrastructure for efficient risk management and for meeting its disclosure requirements with the Financial Market Authority. The orders are sent electronically to OeKB and automatically routed to the appropriate stock exchange for execution.
Code of Conduct
All members of the Federation of European Securities Exchanges (FESE), the European Association of Central Counterparty Clearing Houses (EACH) and the European Central Securities Depositories Association (ECSDA) agreed on a Code of Conduct for Clearing and Settlement on 31 October 2006. With this voluntary Code of Conduct the stock exchanges, clearing institutions and central depositories actively contribute to the increased efficiency and further harmonisation of the European capital market. The aim of the Code of Conduct is not only to ensure greater transparency of prices and services in crossborder securities business but also to invigorate cross-border securities trading. Thanks to technical interfaces that achieve interoperability between the different platforms, and through separate accounts and redesigned services, market participants can now source their clearing, settlement and custody services from separate providers. In its capacity as CSD.Austria, OeKB too is a signatory to the Code of Conduct.
European developments
In 2010 the European Commission began preparations for two directives relevant to CSD.Austria: the Securities Law Directive (SLD) and the Regulation for CSDs. Their further development and implementation will continue to be monitored closely in 2011. Efforts regarding the Target2 Securities (T2S) securities settlement platform were focused on drafting a written agreement between the Eurosystem and the central securities depositories. The final wording, and thus the basis for a decision on joining T2S, will become available in 2011.
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Annual Report 2010
7 CCP Austria Abwicklungsstelle fr Brsengeschfte GmbH

The CCP Austria Abwicklungsstelle fr Brsengeschfte GmbH (CCP.A) was jointly established by OeKB and the Vienna Stock Exchange in 2004. CCP.A acts as the clearing agent for the Vienna Stock Exchange (VSE) and as the central counterparty for all trades concluded on the exchange. In this key role, CCP.A makes a major contribution to the stability of the financial market. For the clearing and settlement of stock exchange transactions in the cash market, CCP.A uses the automated SICS system (Settlement Information and Clearing System) developed and operated by OeKB. It uses the CSD.Austria accounts of the Vienna Stock Exchange members to enter the net securities balances. Exchange transactions in the derivatives market are cleared via the EUREX system operated by the Vienna Stock Exchange. More than 9,700 different products are currently processed through these systems. The table below shows the transaction volume contracted and cleared in 2010 by CCP.A as the central counterparty.
2009
2010
Cash market
Stock exchange turnover Number of orders executed Turnover in EUR million (double counted) Cleared net positions Total number Netting factor 1 302,167 33.8 305,343 31.7 6,139,786 75,241 5,936,050 76,556
Derivatives market
Exchange turnover Number of contracts Volume of contracts in EUR million Volume of exchange-traded options in EUR million
1
766,628 12,179.67 136.10
838,911 16,993.33 131.31
Netting factor: Number of trades divided by number of net positions.
As of the end of 2010, CCP.A served 68 Austrian and international members, most of which were also members of the Vienna Stock Exchange. To ensure the fulfilment of transactions under constantly changing market conditions, CCP.A employs a multi-tiered collateral system. The risks are recalculated several times per day and every clearing participant deposits security according to its particular level of risk.
At the end of 2010 the CCP.A held collateral and other security totalling about EUR 21.5 million in the form of a common fund (the clearing fund) for the cash and derivatives market and in the form of individual security of clearing members. CCP.A fully implemented the Code of Conduct in a timely manner. It conducted another self-assessment in 2010. Implementation was confirmed in assurance reports by the auditor in connection with the financial statements for the years 2008 and 2009.
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Annual Report 2010
8 Energy Market Services

OeKB has taken advantage of the liberalisation of the Austrian electricity and gas market to develop a new business segment. In its functions of financial clearing and risk management, it has positioned itself as a centre of excellence serving the energy sector as a whole. In this context, unlike its role in the capital market, OeKB does not act as a clearing agent or central counterparty.
8.1 Balancing energy
What is balancing energy?
APCS
Based on experience, current weather, season and other factors, participants in energy markets (electricity and gas) forecast the amounts of energy which their customers will consume or which their generating facilities will produce and make available. On the basis of these projections, they contract to buy or sell energy. The actual consumption and generation typically differ from the forecasts. The difference between the forecast-based contracts and actual consumption/generation is referred to as balancing energy, which is the energy shortfall or surplus that market participants buy or sell in the market.
APCS Power Clearing and Settlement AG was licenced in April 2001 by the Ministry of Economic Affairs as the balancing energy clearing agent for electricity. On behalf of APCS, OeKB since October 2001 performs the financial clearing and risk management for energy market participants for all positions arising in connection with balancing energy.
AGCS
Analogous to its activities in the power market, since 2002 OeKB has been responsible for the financial clearing and risk management in the gas market, under contract to AGCS Gas Clearing and Settlement AG.
8.2 Energy exchange
EXAA
With the opening of EXAA, the Austrian energy and environment exchange (EXAA Abwicklungsstelle fr Energieprodukte AG) in 2002, OeKB also acquired the mandate for providing financial clearing and risk management for the market segment of exchangetraded electricity.
Trading of carbon emission allowances (also referred to in Austria as CO2 emission certificates) began in June 2005. For banks and industrial companies, OeKB Business Services GmbH, as an EXAA member, provides a simple and low-cost means of buying and selling CO2 certificates on the exchange. This service is used especially by companies that are affected by the allocation plan, but for whom it would not be economical to become a member of the exchange.
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Annual Report 2010
8.3 Registry service provider for CO2 emission certificates
ECRA
At the beginning of May 2004, in connection with the energy market services project, OeKB (together with the Austrian chamber of commerce, Investkredit Bank AG, Lenzing AG, Porr, smart technologies, APCS, members of the cement and concrete industry and seven energy firms) founded a new company, ECRA Emission Certificate Registry Austria GmbH. At present, OeKB holds a 12.5% ownership interest in ECRA.
ECRA was appointed by the Federal Ministry of Agriculture, Forestry, Environment and Water Management to operate the registry for CO2 emission allowances for all of Austria. The registry manages the required accounts for the plant owners in which the issuance of carbon allowances as well as all subsequent transfers (purchases and sales) are recorded.
8.4 Green electricity
OeMAG
In accordance with the 2006 amendment of the Green Electricity Act, OeMAG Abwicklungsstelle fr kostrom AG was set up in Austria as the organisation in charge of operating the market for environmentally friendly, green electricity, thus putting in practice the corresponding EU legislation.
Licensed by the Federal Ministry of Economic Affairs, OeMAG is responsible for the purchase and sale of green power. On behalf of OeMAG, OeKB performs the necessary financial clearing and risk management for green electricity transactions.
9 Information Services
The global financial and economic crisis and its aftereffects have confronted all market participants with unprecedented challenges. Against this backdrop, 2010 even more than earlier years brought home the great importance of reliable high-quality data: Wise strategic business decisions that can stand the test of time require dependable knowledge both of market opportunities and of the associated risks. OeKBs department in charge of making such knowledge available, through macro- and microeconomic analytical reports, is Bank and Business Information (BBI). It services companies in Austria and abroad, as well as all businesses of the OeKB Group.
Thomson Reuters & OeKB CEE Business Climate Index for CEE
The Thomson Reuters & OeKB CEE Business Climate Index was developed by BBI to support companies with international operations, as well as analysts and other market observers, in their Central and Eastern European activities. Leading indicators for a total of 19 countries in Central, Eastern and Southeastern Europe give early signs of opportunities in the region and enable users to keep risks firmly in sight. Amid the global crisis, the index clearly proved its validity: At a very early stage, it already provided the first clues to a spreading of the crisis to some countries in the
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Annual Report 2010
region, and as early as the first half of 2009, it began to signal a nascent new optimism in Central and Eastern Europe. In the course of 2010 the Business Climate Index readings substantiated the impression that the economic recovery in a number of countries and industries should be regarded as a lasting one. The Business Climate Index for Central and Eastern Europe is marketed worldwide through a successful, established partnership with Thomson Reuters. Additionally, in 2010 numerous companies made use of the leading indicators calculated quarterly by OeKB for their strategic decisions in the region.
ments, relevant markets and companies. This customised news round-up is available to clients daily from 9 am on the Internet, is stored in the companys own media archive and can be retrieved at any time. At the reporting date, BBIs Online Press Review had about 2,500 subscribers in Austria and abroad, for whom it was and is highly important in the global volatile environment to remain authoritatively informed on developments in the various national and international markets.
austrian business monitor Information Broking
The Information Broking service, targeted mainly to business enterprises, financial services providers in Austria and other countries, and scientific and research institutions, continued to be expanded in 2010, as demand for professional, made-to-measure research is progressively rising. Working to customers exact wishes, the specialists at BBI prepare studies, analyses and concise reports on specific aspects of global financial and economic developments. Last year the customer requests focused particularly on analysis of market structure and potential, sector reports, comparative evaluations of business locations, peer group reviews and company profiles: In 2010, leading companies relied on analysis from BBI especially in their globalisation strategies and the further growing of their operating business. Strategic alliances with international data vendors were further expanded, developing joint projects through which BBI continues to add to its reputation as a provider of premium market information.
With its austrian business monitor, BBI provides comprehensive daily news on industries and industry players: Selected press reports from a wide range of media give a rapid overview of trends in all sectors of the economy. The publication also focuses on reports about significant international and all Austrian firms, from small family businesses all the way to multinational groups. Working together with APA, which contributes its technical expertise, the daily news update is stored in a company and industry database. This product too, which focuses primarily on business trends in Austria, was very well received in the year under review. It allows subscribers to follow not only broad trends, but also to stay consistently informed on company-specific developments at customers, suppliers and strategic allies.
Information & communication and knowledge management
Online Press Review
In the form of the Online Press Review (which represents a longstanding successful collaboration with APA Austria Presse Agentur), BBI provides companies in various industries with a daily, focused compilation of information on current affairs: BBIs media analysis team, using customer-specified profiles, searches the national and international press and selects all pertinent news about financial and business develop-
In 2010, leading domestic and foreign business enterprises made use of BBIs information and knowledge management expertise. The main focus of BBIs in-house projects was to analyse OeKBs internal communication processes in terms of efficiency and to further streamline them. The information services for all business areas of the Bank have undergone extensive customisation. It continues to be BBIs strategic goal to generate direct value-added for OeKBs operations. Moreover, BBI seeks to promote the sustained commercial success of OeKB by creating and expanding practice-oriented knowledge management structures.
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10 OeKB Business Services GmbH

Safe business software
OeKB Business Services GmbH (OeKB-BS) is a specialist IT service provider owned by OeKB AG. The company develops and operates business software solutions of the highest quality, security and reliability: Marketed under the slogan of safe business software, its solutions are web-based, secure, professional, up-to-date, and appropriate to user needs. The solutions of OeKB Business Services address the requirements of customers in the most diverse sectors, from finance to manufacturing and from government to private companies. The firms customers benefit from its understanding of complex business processes and from custom-tailored solutions that precisely meet their specifications. Confidentiality in handling sensitive business data is assured.
At year-end, OeKB Business Services GmbH employed a staff of nine. The companys equity was EUR 2,120,554.49. Its financial year closed with a net profit of EUR 72,922.99.
Outlook for 2011
From todays perspective, a slow upturn can be expected in 2011 for the economy as a whole, though with pronounced sectoral differences in the pace of recovery. With better growth prospects, companies will be more willing again to invest in information technology. This outlook is also supported by the rise in new orders during the second half of 2010. The risks for 2011 are seen as residing mainly in the as yet unconfirmed durability and actual strength of the macroeconomic upswing and directly related to this the true readiness of the business sector to invest in new IT solutions. The opportunities for OeKB Business Services GmbH lie in the ever-growing demand for solutions that improve and automate business-critical processes. The company meets this need with its proven technological and business process excellence and its extensive portfolio of solutions that gives clients a wide range of software resources from a single highly capable supplier.
Business in 2010
In 2010 OeKB Business Services placed particular emphasis on broadening its client base and expanding its portfolio of solutions. To its existing business segments (open source software and Microsoft software), it added the new one of software sales under licence. The focus in this new business activity was on select partner solutions that optimally complement the solutions portfolio and reflect the companys own core competencies. The work done in the year centred on the continued servicing of ongoing projects and the launch of several new ones. For example, the company developed a proprietary standard software solution for the management of visitors and visitor cards for the Microsoft SharePoint platform, and implemented the solution for the first time.
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11 Oesterreichische Entwicklungsbank AG - Funding tomorrows prosperity

Oesterreichische Entwicklungsbank AG (OeEB) is a development bank. Having a public mandate, OeEB focuses on long-term investment financing of largely private sector projects in developing countries. In evaluating the commercial viability of projects, the development aspects of each individual transaction are accorded special importance. Support is not explicitly tied to Austrian investors or suppliers, although the potential of Austrian companies is to be utilised on a project-centred basis. In addition to the income that it generates itself, OeEB also annually receives about EUR 20 million from the Austrian federal government budget for project identification, preparation, monitoring and for nonfinancial project support provided by OeEB that is to generate development benefits. OeEBs second full financial year was a successful one. As a result both of the financial and economic crisis and intensified project acquisition activities, 2010 brought a large number of requests for financing, with a number of deals being signed by OeEB. To cope with the expansion of activity, OeEB hired more staff and adjusted its internal structures. At the end of December 2010, OeEB had 18 employees. The total transaction volume (based on contracts signed) was approximately EUR 132.0 million. Profit for the year was EUR 781,648.40. After transfers to reserves, unallocated profit for the year amounted to EUR 280,483.95. OeEB has share capital of EUR 5 million, which is entirely held by OeKB. The work of the development banks staff focuses on the immediate core activities: the identification, structuring, implementation and management of eligible projects. All support functions, such as accounting, IT, human resources administration, internal audit and asset management have (with the approval of the Financial Market Authority) been outsourced to OeKB on a paid basis. The resulting lean organisation is expected to allow OeEB to operate very cost-effectively. Information about OeEB and its business activities is available at www.oe-eb.at.
12 OeKB EH Beteiligungs- und Management AG

OeKB AG holds a 51% ownership interest in OeKB EH Beteiligungs- und Management AG, a company founded in 2008. The other 49% is owned by Hamburg-based Euler Hermes KreditversicherungsAG, the worlds largest credit insurer. OeKB EH Beteiligungs- und Management AG is the sole owner of PRISMA Kreditversicherungs-Aktiengesellschaft, OeKB Versicherung Aktiengesellschaft and OeKB Sdosteuropa Holding Ges.m.b.H. This structure of the insurance holdings serves two main objectives: A very comprehensive range of credit insurance products can continue to be offered to the Austrian business sector through a coordinated two-brand, two-company strategy. The development of local credit insurance opportunities in Southeastern Europe is being vigorously pursued.
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12.1 PRISMA Kreditversicherungs-Aktiengesellschaft
PRISMA primarily insures short-term trade receivables in OECD countries against the risk of customer insolvency. In addition to its headquarters in Vienna, the company has offices in Linz, Graz and Innsbruck. As of 31 December 2010, a staff of 121 people was employed. PRISMA commands a market share of about 37%, making it the largest provider in the Austrian credit insurance market. PRISMA Kreditversicherungs-AG holds the majority of the shares of PRISMA Risikoservice GmbH & Co KG. This subsidiary provides most of the insurance companys credit analysis, for which it draws on the information resources of the globe-spanning Euler Hermes network. This network gives Austrian clients access to information on 40 million companies in more than 50 countries. PRISMA had an eventful year in 2010: At the start of the year, the company began to work with the newly established Austrian branch of Euler Hermes Collection GmbH and thus gradually wound down its own collections business. PRISMA cooperates closely with this Group company and is thus able to provide both credit insurance and collections services from a single greater source. Corporate culture and values have long been a central theme at PRISMA. In the spring, a staff survey was conducted on this subject. New activities were planned on the basis of the findings. As well, in the summer a comprehensive customer satisfaction survey was carried out that encountered positive reviews while also revealing scope for optimisation. The newly created Risk Management and Controlling department focuses its attention especially on Solvency II and process management.
The project known as One Euler Hermes continues to progress in the Group. Among other changes, it will group the more than 50 national Euler Hermes companies into six, redrawn regions. Euler Hermes Hungary will be part of a different region than before. PRISMA therefore transferred its ownership interest in this company, which it had held on a fiduciary basis, to Euler Hermes. Thanks to the improvement in economic conditions, the revenue performance was above target. Revenue for 2010 was approximately EUR 63 million. New business, on the other hand, did not reach the targeted level. PRISMA nonetheless further expanded its lead as the largest player in the market. Insolvencies eased slightly over the course of the year. Despite the major insolvency of the A-Tec Group, the claims ratio fell from the prior year, to about 28%. However, reinsurance costs increased markedly as a result of the high level of insolvencies over the past years. After deducting expenses, the technical result (i.e., underwriting profit) amounted to EUR 4.4 million. Including the effect of net financial items, the companys profit before tax was EUR 7.0 million. PRISMAs reinsurance provider is the Euler Hermes Group. The retention is capped by an excess-of-loss contract. At 31 December 2010 PRISMA had equity of EUR 27.1 million.
Outlook for 2011
In 2011, PRISMA aims for continuing profitable and steady growth. It will focus on further increasing its market share as the market leader. As the top provider in the market, a key task for PRISMA will also be to further develop the credit insurance market in Austria.
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12.2 OeKB Versicherung Aktiengesellschaft
OeKB Versicherung AG is a credit insurer focused primarily on insuring short-term receivables from sales not only into western industrialised countries or within Austria itself, but also and especially into emerging economies. The companys defining core competency is its expertise in difficult markets. A total of 41 people work at the headquarters in Vienna and the office in Linz. Of these, 20 are employed directly by the company and the other staff members are on secondment from OeKB. The company has a market share of almost 15% and ranks third in the Austrian credit insurance market. In its activities, OeKB Versicherung itself concentrates on the immediate insurance core business, that is, sales, underwriting, credit analysis and claims handling. All support functions, such as accounting, IT, human resources administration, internal audit and asset management, are outsourced to OeKB on a paid basis with the approval of the Financial Market Authority.
OeKB Versicherung offers a comprehensive customer care concept: From the start, every client has the advantage of a single personal point of contact at OeKB Versicherung. The relationship manager is responsible for everything from drafting the insurance contract, to limit monitoring, to handling the clients claims. In this way, clients are guaranteed easy, straightforward access to custom-tailored and secure service.
Business performance
In 2010 the companys sixth year in business a significant expansion in Austrian exports and generally higher premiums in the market led to revenue growth for OeKB Versicherung. The premium income of EUR 23.7 million was up 15.6% year-on-year; the claims ratio was 36.2%. Taking into account an addition to the claims equalisation provision, the companys technical result amounted to approximately EUR 1.4 million. After net financial result, profit before tax was EUR 2.2 million. As the Austrian government underwrote reinsurance for so-called non-marketable risks during the economic crisis, OeKB Versicherung was able to continue to provide the accustomed support to its clients selling into difficult markets. As agreed, this supplementary reinsurance cover expired at 31 December 2010. The reinsurance contract with Luxembourg-based Euler Hermes Rassurance SA remains in effect. From the beginning of 2011, the risks that were until then covered by the government reinsurance are once again reinsured with Euler Hermes Rassurance SA.
Product portfolio
Based on each customers individual requirements, OeKB Versicherung provides the right type of receivables insurance. The most convenient product is the Global Policy known as P6, covering all transactions of the client with all customers worldwide through one and the same policy. Alternatively, Single-Buyer cover (P5) insures all sales to a single customer. For one-time transactions, Single-Transaction policies (P1) are a natural choice. Standard cover is available both for commercial risks (payment default and insolvency) and political risk (for instance, receivables with public sector institutions, and transfer risk).
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Outlook for 2011
The economic trend in the traditional markets of Austrian exporters is showing a pattern of volatility. Export firms are therefore increasingly targeting emerging markets, where economies are growing more consistently. However, these markets too are associated with considerable risks, which must be analysed, monitored and insured.
With its special expertise in difficult countries, OeKB Versicherung will continue to back its clients sales into new export markets in 2011.
12.3 OeKB Sdosteuropa Holding Ges.m.b.H.
The object of OeKB Sdosteuropa Holding is to establish and develop local service companies and credit insurance facilities in Southeastern Europe for marketable export and domestic risks based on the underwriting standards of a private credit insurer, and to manage the resulting companies. The company has share capital of EUR 2 million and total equity of approximately EUR 8.2 million. The equity interest in Euler Hermes Servicii Financiare S.R.L. (EHSF), a service provider for the Euler Hermes branch in Romania, was administered by OeKB Sdosteuropa Holding Ges.m.b.H. on a fiduciary basis for OeKB Zentraleuropa Holding GmbH until it was sold in the year to the Euler Hermes Group. The subsidiary OeKB Financial Services d.o.o. (OFSS) OeKB d.o.o. za finansijske usluge based in Belgrade, closed the 2010 financial year with a profit. It is 51% owned by OeKB Sdosteuropa Holding and 49% owned by Agencija za osiguranje i finansiranje izvoza Republike Srbije AD (AOFI), an export credit agency in Serbia. OFSS provides credit decisions for credit insurers, credit information on Serbian companies and, very successfully, out-of-court debt collection services in Serbia.
In January 2010, the Zagreb-based Hrvatsko Kreditno Osiguranje d.d. (HKO) became the first private Croatian credit insurance company registered in the country. The company is owned by OeKB Sdosteuropa Holding with a shareholding of 49% and by HBOR (Hrvatska banka za obnovu i razvitak) with an interest of 51%. HKO insures companies domiciled in Croatia against default risks that are marketable. In October 2010, in accordance with Croatian legal requirements, a service company was founded as a subsidiary of HKO to provide information and risk assessment. The new company, named Poslovni info servis d.o.o., was furnished with equity in the amount of HRK 2 million. In the course of 2010 the cooperation with the Bosnian-Herzegovinian export credit agency, IGA, in the area of credit information was further expanded. In 2011, OeKB Sdosteuropa Holding will continue to work on the execution of new projects to set up local credit insurance facilities in Southeastern Europe.
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13 System of internal control

Risk assessment
The Executive Board has responsibility for the establishment and design of a system of internal control and of risk management that meets the companys needs, particularly in relation to the accounting and reporting process. The key features of the internal control system at OeKB can be described in terms of the definition used by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO framework consists of five interrelated components: control environment, risk assessment, control activities, information and communication, and monitoring. The purpose of the internal control system at OeKB is to support management such that it is able to ensure effective and continually improving internal controls regarding accounting. It is intended to ensure compliance with policies and rules and to create conditions conducive to the effectiveness of specific control activities in the key accounting processes. Internal Audit independently and regularly verifies the adherence to internal rules, including in the area of accounting. The head of Internal Audit reports directly to the Executive Board.
Risks relating to the accounting process are identified and monitored by management, with the focus placed on material risks. The preparation of the financial statements regularly requires estimates to be made which involve the inherent risk that future developments will differ from these estimates. This is particularly true of, but not limited to, the following conditions or items relating to the financial statements: financial instruments, employee benefit costs and provisions, the outcome of legal disputes, collectability of receivables, and trends in the value of interests in subsidiaries and other companies. In some cases, external experts are consulted and/or reliance is placed on publicly accessible sources in order to minimise the risk of errors of judgement.
Control activities
In addition to the Supervisory Board and Executive Board, the general control environment also encompasses middle management, such as the department heads. All control activities are applied in-process during the regular ongoing operation of the business processes in order to ensure that potential errors in financial reporting are detected and corrected. The Executive Board is responsible for ensuring that the levels of the reporting hierarchy are structured such that an activity and the controls on the activity are not performed by the same person (following the principle of strict separation of responsibilities). Control activities regarding information technology security represent a cornerstone of the internal control system. Thus, the separation of sensitive responsibilities is supported by restrictiveness in the assignment of IT privileges. For accounting and financial reporting, the software SAP ERP Central Component 6.0 is used. The functioning and effectiveness of this accounting system is assured, among other ways, by automated IT controls installed in the system.
Control environment
The most fundamental aspect of the control environment is the corporate culture in which management and employees operate. OeKB actively works to improve communication and the transmission of the basic corporate values, with the aim of ensuring high moral and ethical standards and integrity within the company and in its external relations. The implementation of the internal control system in respect of the accounting process is set out in the companys internal policies and rules. The responsibilities in relation to the internal control system were adjusted to fit the companys organisational structure, in order to safeguard a satisfactory control environment that meets the requirements.
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Monitoring
In subsidiaries, the respective management has ultimate responsibility for the establishment and design of a system of internal control and of risk management appropriate to the respective companys requirements, particularly in relation to the accounting process, and for compliance with the associated Group-wide policies and rules.
Information and communication
The responsibility for the enterprise-wide ongoing monitoring of business processes rests with management and the Supervisory Board as well as the Controlling department. Further, the respective department heads are responsible for the monitoring of the relevant areas of activity; for example, checks and validations are conducted at regular intervals. Internal Audit is also involved in the monitoring process. The system of internal control likewise performs a monitoring and oversight function. The findings of the monitoring activities are reported to management and the Supervisory Board. The Executive Board regularly receives summarised financial reports such as, for example, monthly financial statements and quarterly segment and risk reports. Financial statements for publication undergo a final review by accounting management staff and the Executive Board before being forwarded to the Audit Committee of the Supervisory Board.
Policies and rules on financial reporting are regularly updated by management and communicated to the staff concerned. As well, the accounting staff members receive frequent training regarding changes in international accounting practices in order to be able to detect risks of inadvertent reporting deficiencies at an early stage.
14 Risk management
Risk management forms an integral tool of overall bank management in the OeKB Group and is the joint responsibility of the whole Executive Board. The risk policy and strategy, set by the Executive Board, aims to assure a sustained return on equity combined with organic growth. The banks special position by virtue of its public mandate from the Austrian government and of its role as a central provider of essential services to the capital market, along with the associated responsibility for the Austrian economy, dictate a very high standard of soundness in OeKBs risk management. An important feature of the banks corporate policy is therefore the conservative management of all risks, including financial risks and risks arising from business operations in general irrespective of whether the risks are OeKBs own or are those managed on behalf of the Republic of Austria yet without neglecting the need for profitability. This approach is also traditionally reflected in a sustainable compensation policy (see section 15, Human resources). A key variable in the measurement and management of risk is economic capital; it is calculated using the concept of Value at Risk (VaR) over a one-year time horizon. In the ICAAP, credit risk, market risk, operational risk and business risk are taken into account quantitatively, through the calculation of economic capital (business risk is considered to be the risk that earnings will suffer as a result of changes in the business environment such as markets, customer behaviour or technology or of inappropriate or inadequately implemented business strategy).
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In the calculation of risk coverage, the economic capital required is compared with the economic capital available. This is done in a multi-tier system addressing various risk coverage objectives. A risk type not included in the calculation of risk coverage is liquidity risk. It is measured and controlled using liquidity gap analysis in accordance with the regulatory requirements and recommendations (such as the recommendations of the Committee of European Banking Supervisors).
As planned, in 2010 the implementation of a comprehensive software solution for risk evaluation and asset/liability management was completed. This is an important enhancement in the integrated management of the bank, as it allows both single-period and discounted multi-period parameters (returns and risks) to be calculated in a single system. In operational risk management, one of the main projects in 2010 was the further improvement of the documentation of the internal control system. As well, the internal control system policy was put into effect by the Executive Board. Details on the risk management of the OeKB Group are provided in notes 48-52 to the consolidated financial statements.
15 Human resources
Given the Groups central significance for Austrias capital market and export industry, OeKB and its subsidiaries are very aware of the importance of highly qualified and motivated staff. Service quality and professionalism, combined with sustained earnings-, cost- and risk-consciousness, are the critical success factors. OeKBs long-term success depends on the commitment of its staff. As a responsible employer, OeKB knows its employees interests and needs. Carefully tailored staff development tools help to create the best possible work environment. In the reporting period, a revised performance appraisal interview process was put into place and, for interested staff, a job rotation system was implemented. The traineeprogramme pilot project underway since the previous year was successfully adopted into regular operations, and two new trainees were accepted for the Capital Market Services and Export Services segments. The programmes first graduate now works as a country analyst in OeKBs Export Services segment. The Groups compensation policy uses both performance criteria and market benchmarks. Care is taken to ensure an appropriate proportion of fixed to variable pay. In keeping with the risk-conscious corporate strategy, variable compensation represents about 10% of total gross compensation. The variable portion is based partly on individual performance as discussed in the performance appraisal interview, and partly to various Group-level performance indicators. These indicators provide a balanced reflection of the Groups profitability, sustained growth in enterprise value, and risk profile. Appropriate controls ensure that variable compensation is paid only when both the Groups earnings and risk profile allow it. These rules are applied at all levels of the organisation, including senior management and the units which generate or control risk. For the subsidiaries, corresponding compensation models are being adjusted in accordance with legal requirements.
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Annual Report 2010
2009
2010
OeKB Groups staff

Total number of employees as of 31 Dec. Of whom part-time employees Total employees in full-time equivalents Average number of employees By age in years Up to 30 More than 30 and up to 40 More than 40 and up to 50 More than 50 and up to 60 More than 60 By length of service in years Up to 5 More than 5 and up to 10 More than 10 and up to 20 More than 20 and up to 30 More than 30 and up to 40 More than 40 100 69 122 95 34 8 97 70 107 107 42 5 44 117 163 89 15 42 114 165 96 11 385 396 402 401 428 83 428 86
In 2010 as well, the importance of employees expertise and work ethic both in the business and service departments was particularly evident. Further synergies were raised through improved servicing of subsidiaries by central corporate departments. In the year under review, important benefits continued to be generated for the Austrian economy at large through the management by OeKB of the programme of Austrian federal guarantees under the Corporate Liquidity Support Act (ULSG) as one of the measures to alleviate the liquidity crisis, along with the continuing operation of Oesterreichische Clearingbank AG (established in late 2008). The Groups staff count at the end of 2010 was 401 full-time equivalents (prior year: 402); the average count during the year was 396 FTE (prior year: 385). The concerted efforts of the entire staff enabled the Group, even in the difficult market situation, to attain an operating profit per full-time equivalent of EUR 200,286.88. The Executive Board would like to express its gratitude and appreciation to all employees for their commitment and contribution to the good business performance achieved. This sincere thank you also goes to the Staff Council, whose members, true to tradition, represented the interests of both the employees and the bank.
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Annual Report 2010
16 Sustainability at OeKB
Welcome recognition of the Groups sustainable environmental management practices came when OeKB was honoured with the 2010 EMAS Award and also placed first in the Austrian Sustainability Reporting Awards Large Companies category. OeKB is involved in the Austrian network of the UN Global Compact, in working groups of the Austrian Society for Environment and Technology (OGUT) and of Transparency International, and seeks to persuade its guarantee holders to commit to following the OECD Guidelines for Multinational Enterprises. After an intensive focus in 2009 on the integration and safeguarding of human rights principles in the Groups business operations, the fight against corruption as the chosen key theme of the Austrian UN Global Compact network in 2010 was made the central focus of OeKBs corporate responsibility activities in the year under review. The dominant motivation for working against corruption is to strengthen fair competition in business. Only when corruption is outlawed and all parties to business transactions take a clear stance against it is corruption no longer seen by some individuals as a way to improve sales results, but is recognised as the criminal act that it is. This anti-corruption stance was discussed during numerous events that OeKB actively participated in or hosted. Thus, both OeKB and development bank Oesterreichische Entwicklungsbank AG (OeEB) are members of the banking sector working group created by Transparency International in January 2010. Here the various institutions present their different compliance policies. The purpose is to achieve a uniform standard and discuss implementation problems in a solutions-centred way. The credit insurance subsidiary OeKB Versicherung reviewed its processes in terms of the principles of the UN Global Compact, and the website of Exportfonds (the OeKB Groups export financing provider for SMEs) offers comprehensive, clear information on anti-corruption practices and considerations. All these activities are interlinked and help to examine the subject of anti-corruption from diverse angles. The standing dialogue with stakeholders continued in 2010, serving especially to keep NGOs and customers abreast of international developments in the OECD the Common Approaches on Environment and Officially Supported Export Credits and the Sector Understanding on renewable energy, water projects and climate protection. These sets of policies for OECD members are currently under revision. Human rights are to be more firmly incorporated into all main OECD Recommendations and Guidelines, which should also lead to a stronger formal emphasis on human rights aspects in the evaluation of prospective and actual projects.
Vienna, 23 February 2011
Oesterreichische Kontrollbank Aktiengesellschaft Signed by the Executive Board
Johannes Attems
Rudolf Scholten
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58
Where does the future of the OeKB Group lie?

In providing trusted services for businesses and the public sector, and in continuing to improve and expand this offering. Sometimes, new companies or institutions grow out of our core activities one recent example is Oesterreichische Entwicklungsbank AG, the development bank. And to help business decision makers, we create useful new services such as the CEE Business Climate Index for Central and Eastern Europe developed by our department.
Verena Ebner
Senior Manager, Bank and Business Information

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Contents Financial Statements

Page
III. OeKB Group Consolidated Financial Statements 2010

Consolidated Income Statement Consolidated Balance Sheet Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement 62 63 64 65
Notes to the Consolidated Financial Statements of the OeKB Group
Accounting policies Segmental information Notes to the Consolidated Income Statement Notes to the Consolidated Balance Sheet Other Information and Risk Report
66 73 75 78 87
IV. Auditors Report
102
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Annual Report 2010
III. OeKB Group Consolidated Financial Statements 2010

Consolidated Income Statement of the OeKB Group
EUR thousand
Notes
2010
2009
Change in %
Interest and similar income Interest and similar expense Share of results of equity-accounted investees Net interest income Impairment losses on loans and advances and other credit risk provisions Net fee and commission income Fee and commission income Fee and commission expense Administrative expenses Net other operating income Operating profit Net gain or loss on financial instruments Profit before tax Income tax and other taxes Profit for the year Attributable to: minority interests Profit for the year attributable to shareholders of the parent 20 19 17 18 14 15 16
790,492 (696,511) 7,051 101,032 (150) 51,164 57,882 (6,718) (80,082) 7,349 79,313 13,584 92,897 (20,699) 72,198 (215) 71,983
1,119,615 (1,011,914) (427) 107,274 45,950 56,466 (10,516) (76,900) 8,837 85,161 33,750 118,911 (27,219) 91,692 (226) 91,466
29.4 31.2 5.8 100.0 11.3 2.5 36.1 4.1 16.8 6.9 59.8 21.9 24.0 21.3 4.9 21.3
+ + + +
2010
2009
Earnings per share

Profit for the year attributable to OeKB shareholders, in EUR thousand Average number of shares outstanding Earnings per share in EUR 71,983 880,000 81.80 91,466 880,000 103.94
At 31 December 2010, as one year earlier, there were no exercisable conversion or option rights. The stated earnings per share therefore represent basic earnings per share and are not subject to dilution.
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IFRS Financial Statements
Consolidated Balance Sheet of the OeKB Group
EUR thousand
Notes
31 December 2010
31 December 2009
Change in %
Assets
Cash and balances at central banks Loans and advances to banks Loans and advances to customers Allowance for impairment losses on loans and advances Other financial instruments Interests in equity-accounted investees Property and equipment and intangible assets Current tax assets Deferred tax assets Other assets Total assets 22 23 24 7, 25 26 28 27 34 34 29 83,060 28,192,342 1,406,150 (224) 1,356,221 52,914 29,482 469 53,085 4,628,787 35,802,286 189,273 30,294,003 1,558,654 (74) 645,888 48,972 30,452 1,100 48,663 1,434,805 34,251,736 + + + + + + 56.1 6.9 9.8 202.7 110.0 8.0 3.2 57.4 9.1 222.6 4.5
EUR thousand
Notes
31 December 2010
31 December 2009
Change in %
Liabilities and equity

Deposits from banks Deposits from customers Debt securities in issue Provisions Current tax liabilities Deferred tax liabilities Other liabilities Equity Attributable to minority interests Total liabilities and equity 30 31 32 33 34 34 35 36 1,411,173 608,053 30,396,838 645,757 13,532 16,106 2,141,615 569,212 3,987 35,802,286 980,594 516,750 29,876,060 507,387 11,533 11,280 1,820,716 527,416 3,912 34,251,736 + + + + + + + + + + 43.9 17.7 1.7 27.3 17.3 42.8 17.6 7.9 1.9 4.5
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Annual Report 2010
Consolidated Statement of Changes in Equity of the OeKB Group
EUR thousand
Called-up share capital
Capital reserves
Retained earnings
Profit for the year attributable to OeKB shareholders
Minority interests
Total equity
2010
At 1 January 2010 Changes in retained earnings Profit for the year Dividends paid and Supervisory Board emoluments At 31 December 2010 130,000 3,347 359,895 130,000 3,347 298,691 61,204 91,466 (61,204) 71,983 (30,262) 71,983 215 (140) 3,987 3,912 527,416 72,198 (30,402) 569,212
EUR thousand
Called-up share capital
Capital reserves
Retained earnings
Profit for the year attributable to OeKB shareholders
Minority interests
Total equity
2009
At 1 January 2009 Changes in retained earnings Profit for the year Dividends paid and Supervisory Board emoluments At 31 December 2009 130,000 3,347 298,691 130,000 3,347 296,571 2,120 22,384 (2,120) 91,466 (20,264) 91,466 226 (139) 3,912 3,825 456,127 91,692 (20,403) 527,416
The amounts of called-up share capital and capital reserves shown above are the same as those reported in the separate financial statements of Oesterreichische Kontrollbank AG. More information on changes in equity is provided in note 36.
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Annual Report 2010
Consolidated Cash Flow Statement of the OeKB Group
EUR thousand Profit before tax Non-cash items included in profit before tax, and adjustments to reconcile profit before tax to cash flows from operating activities: Depreciation, amortisation and impairment of property and equipment and intangible assets Changes in provisions Gains/losses from disposal and/or valuation of investments and property and equipment Unrealised gains/losses from movements in exchange rates Other non-cash items Changes in operating assets and liabilities, after adjustment for non-cash components: Loans and advances to banks Loans and advances to customers Securities at fair value through profit or loss Other operating assets Deposits from banks Deposits from customers Debt securities in issue Other operating liabilities Interest and dividends received Interest paid Income tax paid Net cash from operating activities Proceeds from disposal of: Property and equipment and intangible assets Purchase of: Interests in unconsolidated companies Property and equipment and intangible assets Foreign exchange adjustments Net cash used in investing activities Issue of shares Dividends paid Net cash used in financing activities Cash and cash equivalents at beginning of period Net cash from operating activities Net cash used in investing activities Net cash used in financing activities Cash and cash equivalents at end of period
2010 92,897
2009 118,911
4,199 140 (56,366) 46,373 10,665
4,203 9,442 (405,557) 374,357 2,341
2,040,394 142,625 (717,618) 11,480 430,299 91,302 (2,278,446) (8,761) 843,634 (708,216) (17,564) (72,963) 3 (3,245) (3,242) (30,008) (30,008) 189,273 (72,963) (3,242) (30,008) 83,060
5,286,527 487,074 27,121 127,147 (298,982) 95,601 (6,574,963) 10,599 1,049,605 (1,102,024) 16,234 (772,364) 8 (5,842) (2,287) (8,121) (20,020) (20,020) 989,778 (772,364) (8,121) (20,020) 189,273
Further detail on cash and cash equivalents is given in note 22. Additional information on the cash flow statement is provided in note 37.
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Annual Report 2010
Notes to the Consolidated Financial Statements of the OeKB Group

Accounting policies
(1) General information
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB AG or OeKB) is a special-purpose bank with its registered office in Vienna, Austria. The activities of the OeKB Group consist largely of export services and capital market services. OeKB AG prepared the consolidated financial statements for the year ended 31 December 2010 in accordance exclusively with International Financial Reporting Standards (IFRS) as adopted by the European Union, thus also satisfying the requirements of section 59a Austrian Banking Act and section 245a Austrian Commercial Code. In preparing these financial statements, the OeKB Group applied all IFRS (including IAS) and their interpretations by the International Financial Reporting Interpretations Committee (IFRIC, formerly Standard Interpretations Committee or SIC) that were effective at the balance sheet date. With the exception of the following items, the consolidated financial statements were prepared on a historical cost basis: Derivative financial instruments (measured at fair value) Financial instruments at fair value through profit or loss. The revised IAS 1 was adopted by the European Union on 18 December 2008. The revision is effective for financial years beginning on or after 1 January 2009. The most important change introduced by IAS 1 relates to the presentation of income and expense recognised directly in equity (now referred to as other comprehensive income). For the presentation of the income statement, the standard allows a choice between two formats: either two separate statements the traditional income statement and a statement of comprehensive income or a single statement that combines both these statements. Additionally, IAS 1 introduces new (non-binding) titles for some of the financial statements used under IFRS: In IAS 1 the balance sheet is now referred to as a statement of financial position, the income statement (in the case of the single-statement option) as a statement of comprehensive income and the cash flow statement as a statement of cash flows. However, as the new titles are not mandatory, they have not been adopted by the OeKB Group. As the revision of IAS 1 relates solely to presentational matters, it has no substantive effects on the OeKB Groups reported financial position, results of operations and cash flows. Further, no statement of comprehensive income is required, as no income or expense was recognised directly in equity in the year under review or in the comparative prior periods.
Changes in accounting methods
The revisions to IFRS 2 have no retrospective effect on the OeKB Groups financial statements for the prior reporting periods and the financial year 2010, as there were no circumstances to which the revisions apply. The interpretations IFRIC 15, IFRIC 19 and IFRIC 14 have no effect on the financial statements of the OeKB Group in prior years or the year under review, as there were no circumstances to which these IFRICs apply.
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Annual Report 2010
IFRS Financial Statements Notes
The amendment effective from 2011 to IAS 24 (Related Party Disclosures) for government-controlled entities has no effect on the financial reporting of the OeKB Group. Uniform accounting policies are used throughout the Group. The accounting principles described below are consistently applied to all financial years represented in these consolidated financial statements.
Critical assumptions and judgements
The preparation of the consolidated financial statements in accordance with IFRS requires the Executive Board to make judgements and to proceed on assumptions about future developments. These judgements and assumptions can have a material effect on the recognition and measurement of the assets and debt, the disclosure of other liabilities at the balance sheet date, and the amounts of income and expenses reported for the financial year. The following assumptions involve a not insignificant risk that they may lead to a material change in the carrying amounts of assets and liabilities in the subsequent financial year:
Financial instruments for which no active market exists are reviewed for impairment by using alternative discounting-based valuation methods. The inputs used for the determination of fair value are based in part on assumptions about future developments. The measurement of existing retirement and termination benefit obligations involves assumptions regarding interest rate, age at retirement, life expectancy, employee turnover and future increases in pay and benefits. The recognition of deferred tax assets is based on the assumption that sufficient tax income will be realised in the future to utilise them. The off-balance sheet obligations from guarantees and from other contingent liabilities are regularly reviewed as to whether they require recognition in the balance sheet.
The estimates and underlying assumptions are reviewed on an ongoing basis. The actual values may deviate from the assumptions and estimates made if the general conditions do not follow the trends expected at the balance sheet date. Changes in estimates of assets, liabilities, income and expense are recognised in the balance sheet or in the income statement as they become known, and the assumptions adjusted accordingly.
(2)
Scope of consolidation
A list of all entities that are represented in the consolidated financial statements of the OeKB Group is provided in note 28, Companies wholly or partly owned by OeKB AG. Three companies are fully consolidated: Oesterreichische Kontrollbank AG (OeKB, the Group parent) and the Vienna-based Oesterreichische Entwicklungsbank AG (OeEB) and sterreichischer Exportfonds GmbH (Exportfonds). There was no change during the financial year in the scope of consolidation, i.e., in the lists of entities that are fully consolidated, included by the equity method, or unconsolidated and held at cost.
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Annual Report 2010
Representing the unconsolidated entities held at cost, two subsidiaries were not consolidated (prior year: two); they are of minor overall significance to the Groups financial position and results of operations. The combined total assets of these two entities represent less than 0.01% of the Groups consolidated total assets, and their combined profit for the year represents less than 3.5% of the Groups consolidated profit for the year. In the OeKB Groups consolidated financial statements, two companies (prior year: two), which are joint ventures, were accounted for by the equity method.
31 December 2010
31 December 2009
Number of companies incl. in the consolidated financial statements or held at cost, by accounting method
Fully consolidated companies Companies accounted for under the equity method Unconsolidated subsidiaries held at cost Other investments in companies held at cost Total 2 2 2 11 17 2 2 2 14 20
(3)
Methods of consolidation
The consolidation of the Group accounts involves purchase-method accounting; equity-method accounting; consolidation of intercompany balances, expenses and revenues; and the elimination of intercompany profits. The separate annual accounts of the fully consolidated entities and of the entities accounted for by the equity method are uniformly made up to 31 December. The Group elected to make use of an option under IFRS 1 on 1 January 2004 (the date of transition to IFRS) by adopting the carrying amounts from the initial consolidation that was performed under the Austrian Commercial Code, or UGB. Acquisitions of subsidiaries are thus accounted for by the purchase method. Under this method, the cost of the acquired ownership interest is offset against the Groups share of the subsidiarys net assets at the time that control passes to the Group. As in the prior periods, the provisions of IFRS 3 on business combinations were not yet applied in the year under review, as no relevant transactions occurred. Intercompany balances, expenses, revenues, profits and losses are eliminated when significant. Companies classified as joint ventures are accounted for under the equity method and are reported as interests in equity-accounted investees. Measurement by the equity method is based on local financial statements, adjusted to adhere to the Groups uniform accounting methods. The annual results are obtained from the latest available annual separate financial statements and sub-groups consolidated financial statements, and the changes in equity are thus recognised in the year in which they occur. Dividends paid by joint ventures to the Group parent company are eliminated by reversing entries. Profits or losses for the year generated by joint ventures are shown in the consolidated income statement within share of results of equity-accounted investees.
(4)
Foreign currency translation
The consolidated financial statements are presented in thousands of euros, rounded by the standard roundhalf-up convention. The euro is also the OeKB Groups functional currency.
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Annual Report 2010
Assets and liabilities denominated in foreign currencies are translated at the reference exchange rates of the European Central Bank at the balance sheet date of 31 December 2010.
Currency
Mid rate
Currency
Mid rate
Currency
Mid rate
Currency
Mid rate
Foreign exchange reference rates at 31 December 2010

AUD CAD CHF CZK 1.3136 1.3322 1.2504 25.061 DKK GBP HRK HUF 7.4535 0.86075 7.383 277.95 JPY NOK PLN RON 108.65 7.8000 3.975 4.262 SEK USD 8.9655 1.3362
(5)
Financial instruments Loans and advances to banks and customers
Loans and advances to banks and customers, to the extent that they are originated by the Group, are carried at their nominal amount or at amortised cost, before deduction of impairment losses and including accrued interest. Individual allowances for impairment losses are recognised for identifiable individual credit risks and for country risks. Impairment losses are not deducted from the corresponding loans and advances but are reported as a separate line item on the face of the balance sheet. Most of the loans and advances to banks made under OeKBs Export Financing Scheme are guaranteed by the Republic of Austria. No collectively assessed provision for credit losses was required.
Other financial instruments
The item other financial instruments consists of all fixed income and variable income securities (including equities) and investments in unconsolidated subsidiaries and smaller shareholdings in other companies. In other words, investments consist of all securities and all unconsolidated investees. Effects on profit or loss are shown in the income statement within net gain or loss on financial instruments. The date of initial recognition or derecognition of other financial instruments is the settlement date. Bonds and other fixed income securities as well as equity shares and other variable income securities are designated at fair value through profit or loss. As there is no trading portfolio in the OeKB Group, these securities form part of the investment portfolio, which is managed on the basis of market values. The securities are measured at fair value at the balance sheet date, with changes in value recognised in profit or loss. The investments in unconsolidated subsidiaries and other companies are initially measured at amortised cost.
Financial liabilities
Financial liabilities are initially measured at their actual proceeds. Premiums, discounts or other differences between the proceeds and the repayment amount are realised over the term of the instrument by the effective interest method and recognised in net interest income (amortised cost). Zero coupon bonds are recognised at present value. Where derivatives are used to hedge the interest rate risk or currency risk associated with liabilities, the hedged debt instruments are recorded at fair value in order to avoid accounting mismatches.
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Annual Report 2010
Derivative financial instruments
The fair value of derivative contracts is calculated by generally accepted methods. Derivatives are recognised at the trade date.
Those derivative transactions which were entered into substantially to hedge the market values of banking book items in the balance sheet are recognised at their market value (their fair value, being the clean price) within other assets or other liabilities. To avoid accounting mismatches, the change in market values of the hedged balance sheet items, like that of the derivatives, is recognised in profit or loss within net gain or loss on financial instruments.
The exchange rate guarantee of the Republic of Austria under the Export Financing Guarantees Act (in German: Ausfuhrfinanzierungsfrderungsgesetz, published in Federal Law Gazette No. 216/1981, as amended), which is used to hedge exchange rate risks under the export financing scheme, is treated as a derivative contract and measured at fair value.
(6)
Determination of fair value
The fair value of listed instruments is deemed to be the quoted market price at the balance sheet date (level 1). Unlisted instruments are measured using the present value method (present value of discounted future cash flows) or suitable option pricing models (Black-Scholes models, the multifactor HJM model or the Hull-White model approach). To the extent possible, the input parameters used for these models are the relevant market prices and interest rates observed at the balance sheet date that are obtained from widely accepted external sources (level 2). The net asset values of investment fund units are determined as set out in the Investment Fund Act.
(7)
Allowance for impairment losses on loans and advances and other credit risk provisions
The allowance for impairment losses on loans and advances and other credit risk provisions relates to impairment of loans and advances, and any provision for credit guarantees. The allowance and provisions are raised for all identifiable credit risks and country risks. As part of its risk management system, the OeKB Group employs a credit analysis system and an internal rating procedure. Counterparties are classified into five internal credit rating categories on the basis of external ratings from internationally recognised rating agencies (Standard & Poors, Moodys and Fitch). Credit ratings are monitored on an ongoing basis for changes. For clients without an external rating, internally developed criteria are applied. As a result, all banking book assets and off-balance sheet business can be classified according to creditworthiness and collateralisation.
(8)
Property and equipment and intangible assets
Property and equipment comprises land and buildings used by the Group, and fixtures, fittings and equipment. Land and buildings used by the Group are those which are used primarily for the Groups own business operations. 1. Property and equipment and intangible assets are recorded at cost less accumulated depreciation and amortisation. The following useful lives are assumed:
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Annual Report 2010
Years
Useful life
Buildings Fixtures, fittings and equipment, other than information technology IT hardware Software 40 3 to 10 3 to 5 3 to 5
2. Low-value assets with an individual purchase price of up to EUR 400 are depreciated completely in the year of acquisition. In note 27, Property and equipment and intangible assets, low-value assets are recorded as additions and disposals in the year of acquisition. Intangible assets comprise only purchased software. Their value is periodically reviewed.
(9)
Sundry liabilities
Sundry liabilities are recorded at amortised cost.
(10) Employee benefit provisions
The provisions for pensions, termination benefits and long-service awards are calculated annually by an independent actuary using the projected unit credit method, in accordance with IAS 19. The biometric basis for the calculations consists of the version of the current computation tables by Pagler & Pagler specific to salaried employees. The key parameters are a discount rate of 4.0% (prior year: 5.0%), an overall rate of salary and pension increases up to 3.5% (prior year: 4.25%) which represents the collective-agreement trend and regular multi-employee increases and unscheduled individual-employee increases and an assumed age at retirement of 58 years 3 months for women (prior year: 58 years) and 63 years 3 months for men (prior year: 63 years) based on the transitional provisions of the Austrian public pension scheme (ASVG) under the Budget Implementation Act 2003. In previous years, the pension obligations for a portion of the staff were transferred to a pension fund under a defined contribution plan. The employee benefit provisions include entitlements of former employees who were already receiving a pension before the time of the transfer, and non-transferred entitlements of present employees. For all active employees, the provisions include a component for a disability pension. The provision for termination benefits is determined so as to cover the legal and contractual entitlements. Actuarial gains and losses are fully recognised in the income statement in every financial year.
(11) Other provisions
Other provisions are recognised where all of the following conditions are met: the OeKB Group has a legal or constructive obligation to a third party as a result of a past event, the obligation is likely to lead to an outflow of resources, and the amount of the obligation can be reliably estimated.
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Annual Report 2010
Provisions are assessed at the amount representing the best estimate of the expenditure required to settle the obligation. If the present value of the obligation determined on the basis of a market interest rate differs materially from its nominal amount, the present value of the obligation is used. In support of the export financing scheme, an interest rate stabilisation provision is maintained to stabilise the interest rates on export credits, based on the constructive obligation regarding the use of surpluses from the export financing scheme. This de facto obligation has a dual basis: it arises from the rules for the setting of interest rates in the export financing scheme, which specify fixed margins for OeKB; and from a directive from the Austrian Ministry of Finance on the use of surpluses from fixed interest facilities. The amount allocated to the provision is the total of i) the amount by which the interest earned in the export financing scheme exceeds the sum of the borrowing costs incurred and OeKBs fixed margin, and ii) the net gain or loss from the measurement of the derivatives and financial liabilities in the export financing scheme. In accordance with these rules, the provision is used to stabilise the terms of export credits.
(12) Current and deferred taxes
The recognition and calculation of income taxes is performed in accordance with IAS 12. Current income tax assets and liabilities are measured by reference to local tax rates. Deferred taxes are determined by the balance sheet/liability approach. Under this approach, the carrying amounts of the assets and liabilities in the balance sheet are compared with the respective tax base for the particular Group company. Any temporary differences between the two sets of valuations lead to the recognition of deferred tax assets or liabilities.
(13) Consolidated income statement Composition of net gains and losses on financial instruments
Net gains and losses on financial instruments are affected by fair value changes recognised through profit or loss, by impairment losses, reversal of impairment through profit or loss, exchange rate movements and derecognition. For financial assets designated on initial recognition as at fair value through profit or loss, and thus measured as such, interest and dividend income is recorded within net interest income.
Revenue recognition
Income and expenses are recognised as they accrue. Interest income is recognised on an accrual basis using the effective interest method. Dividend income is recognised at the time of the decision to pay the dividend.
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Annual Report 2010
Segmental information
In the segmental analysis presented below, the activities of the OeKB Group are divided into business segments. The delineation of these three segments Export Services, Capital Market Services and Other Services is based on the internal control structure and the internal financial reporting to the Executive Board as the chief operating decision-making body. The financial information for these segments is regularly reviewed to allocate resources to the segments and judge their performance. The Export Services segment encompasses the management of guarantees provided by the Republic of Austria through OeKB as the governments official agent under the Export Guarantees Act (in German: Ausfuhrfrderungsgesetz); OeKBs Export Financing Scheme; and the shareholding in sterreichischer Exportfonds GmbH. The Capital Market Services segment comprises all services provided by Oesterreichische Kontrollbank AG relating to the capital market, clearing and settlement of on-exchange and off-exchange securities transactions, the CentralSecuritiesDepository.Austria, and clearing services for the energy market. The Other Services segment consists of OeKBs information services, its own-account investment portfolio, the activities of the OeKB Group in private sector credit insurance, and Oesterreichische Entwicklungsbank AG.
EUR thousand
Export Services
Other Services
Total
Results by business segment in 2010

Interest and similar income Interest and similar expense Share of results of equity-accounted investees Net interest income Impairment losses on loans and advances and other credit risk provisions Net fee and commission income Fee and commission income Fee and commission expense Administrative expenses Net other operating income Operating profit Net gain or loss on financial instruments Profit before tax Income tax and other taxes Profit for the year Attributable to minority interests Profit for the year attributable to shareholders of the parent Segment assets Segment liabilities 21,049 24,574 (3,525) (38,644) 16 61,223 (174) 61,049 (14,349) 46,700 (215) 27,484 29,610 (2,126) (24,871) 1,612 4,173 4,173 (975) 3,198 (150) 2,631 3,698 (1,067) (16,567) 5,721 13,917 13,758 27,675 (5,375) 22,300 (150) 51,164 57,882 (6,718) (80,082) 7,349 79,313 13,584 92,897 (20,699) 72,198 (215) 773,443 (694,641) 78,802 (52) (52) 17,049 (1,870) 7,103 22,282 790,492 (696,511) 7,051 101,032
46,485 34,907,707 34,322,292
3,198 10,772 32,022
22,300 883,807 878,760
71,983 35,802,286 35,233,074
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Annual Report 2010
EUR thousand
Export Services
Other Services
Total
Results by business segment in 2009

Interest and similar income Interest and similar expense Share of results of equity-accounted investees Net interest income Impairment losses on loans and advances and other credit risk provisions Net fee and commission income Fee and commission income Fee and commission expense Administrative expenses Net other operating income Operating profit Net gain or loss on financial instruments Profit before tax Income tax and other taxes Profit for the year Attributable to minority interests Profit for the year attributable to shareholders of the parent Segment assets Segment liabilities 16,533 24,349 (7,816) (36,638) 24 69,551 (1,456) 68,095 (15,197) 52,898 (226) 26,825 28,780 (1,955) (24,345) 972 3,403 3,403 (741) 2,662 2,592 3,337 (745) (15,917) 7,841 12,207 35,206 47,413 (11,281) 36,132 45,950 56,466 (10,516) (76,900) 8,837 85,161 33,750 118,911 (27,219) 91,692 (226) 1,097,231 (1,007,599) 89,632 (49) (49) 22,384 (4,315) (378) 17,691 1,119,615 (1,011,914) (427) 107,274
52,672 33,051,877 32,835,093
2,662 10,522 40,101
36,132 1,189,337 849,126
91,466 34,251,736 33,724,320
Transactions offset between segments represent services rendered. Services by Oesterreichische Kontrollbank AG to subsidiaries are provided at cost. No reconciliation of the amounts for the reportable segments to the amounts recorded in the consolidated balance sheet and income statement is necessary, as the consolidation items are assigned directly to the segments. The segment information is, generally speaking, based on the same accounting methods as the consolidated financial statements. As the regional focus of the OeKB Groups activities lies in Austria, a geographic segmentation is not considered meaningful and is omitted.
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Annual Report 2010
Notes to the Consolidated Income Statement of the OeKB Group

(14) Net interest income
EUR thousand
Amortised cost 2010
Fair value option 2010
Total 2010
Amortised cost 2009
Fair value option 2009
Total 2009
Interest income Loans and advances and money market instruments Fixed income securities Equity shares and other variable income securities Investments in unconsolidated subsidiaries and other companies Share of results of equity-accounted investees Interest expense Money market instruments and current accounts Debt securities in issue Net income from leasing activities Leasing income Depreciation of leased assets and other leasing expenses Total
775,008 773,336 1,672 7,051 (385,286) (19,404) (365,882) 396,773
15,484 10,128 5,356 (311,225) (311,225) (295,741)
790,492 773,336 10,128 5,356 1,672 7,051 (696,511) (19,404) (677,107) 101,032
1,103,718 1,101,821 1,897 (427) (499,807) (32,446) (467,361) 6 437 (431) 603,490
15,891 10,101 5,790 (512,107) (512,107) (496,216)
1,119,609 1,101,821 10,101 5,790 1,897 (427) (1,011,914) (32,446) (979,468) 6 437 (431) 107,274
(15) Impairment losses on loans and advances and other credit risk provisions
In the 2010 financial year an impairment loss of EUR 149,545 was recognised in respect of microcredits extended by OeKB.
(16) Net fee and commission income
EUR thousand
2010
2009
Credit operations Securities services Export guarantees Energy clearing Other services Total
1,041 25,416 18,694 2,126 3,887 51,164
409 24,756 15,096 2,090 3,599 45,950
The export guarantee activities represent services provided by OeKB on behalf of the Austrian government; additional detail is provided in the Segmental information section of this report.
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Annual Report 2010
(17) Administrative expenses
EUR thousand
2010
2009
Staff costs Salaries Social security costs Pension and other employee benefit costs Other administrative expenses Depreciation, amortisation and impairment of property and equipment and intangible assets Total
53,315 35,953 7,620 9,742 22,568 4,199 80,082
50,688 33,905 7,268 9,515 22,009 4,203 76,900
The auditors remuneration is included in other administrative expenses and consisted of fees of EUR 333,000 (2009: EUR 285,000) for the audit of the Groups annual accounts for 2010.
(18) Net other operating income
EUR thousand
2010
2009
Other operating income Other operating expenses Total
8,668 (1,319) 7,349
9,536 (699) 8,837
The item other operating income relates largely to service fees received by OeKB from non-fully consolidated subsidiaries for providing outsourced services on their behalf. In addition, in November 2008, OeKB was given the mandate to conduct all operating activities of Oesterreichische Clearingbank AG.
(19) Net gain or loss on financial instruments
Net gain or loss on financial instruments represents gains and losses from the disposal and valuation of securities, interests in investments and other companies. The gains from securities of EUR 23.8 million (2009: EUR 39.4 million) included realised gains of EUR 3.6 million on disposal of securities (2009: EUR 3.0 million). The losses from securities were EUR 8.0 million (2009: EUR 3.0 million). Foreign exchange differences and the fair-valued debt securities in issue and derivatives relate primarily to the export financing scheme and are to be regarded as a single unit from an economic point of view. The strong fluctuations in both items were driven by exchange rate movements, particularly in the US dollar and Swiss franc, but largely offset each other as a result of the hedging function of the derivatives.
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Annual Report 2010
EUR thousand
2010
2009
Net gain or loss on financial instruments

Net gain or loss from measurement at fair value through profit or loss Securities Foreign exchange differences Debt securities in issue and derivatives Subtotal Net gain or loss on investments in unconsolidated companies Total 15,761 (46,411) 44,789 14,139 (555) 13,584 36,376 (374,801) 375,172 36,747 (2,997) 33,750
The change in fair values of financial liabilities resulted exclusively from changes in market interest rates. The net loss on investments in unconsolidated companies reflects write-downs of EUR 0.7 million and valuation gains of EUR 0.15 million.
(20) Income tax and other taxes
EUR thousand
2010
2009
Income tax
Current tax expense Deferred tax expense/(benefit)
Total
20,299 400 20,699
16,493 10,726 27,219
The actual taxes are calculated on the tax base for the financial year, at the local tax rates applicable to the individual Group companies. The taxation at the standard Austrian income tax rate is reconciled to the reported actual taxes as follows.
EUR thousand
2010
2009
Income tax reconciliation

Profit before tax Tax expense at Austrian standard corporate income tax rate of 25% Tax effect of tax-exempt results of investees Tax effect of other tax-exempt income Tax effect of non-deductible expenses Adjustment for prior years Other tax effects Total 92,897 23,224 (2,279) (185) 178 (1,916) 1,677 20,699 118,911 29,728 (1,720) (401) 738 (3,390) 2,264 27,219
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Annual Report 2010
(21) Appropriation of profit
The Executive Board will propose to the 65th annual general meeting on 25 May 2011 that the profit available for distribution recorded in the parent company financial statements for the year 2010 in the amount of EUR 20,297,328.91 be used to pay a dividend of EUR 22.75 per share. The amount of the resulting total proposed dividend is EUR 20,020,000.00. This represents approximately 15% of the participating ordinary share capital for 2010 of EUR 130,000,000.00. After payment of the Supervisory Board emoluments, the balance, amounting to EUR 10,177.91, is to be carried forward.
Notes to the Consolidated Balance Sheet of the OeKB Group

(22) Cash and balances at central banks
This item consists solely of cash and balances with central banks and corresponds to cash and cash equivalents reported in the cash flow statement.
(23) Loans and advances to banks
EUR thousand
Repayable on demand
Other maturities
31 Dec. 2010 Domestic banks Foreign banks Total 1,565 4,814 6,379
31 Dec. 2009 7,592 2,731 10,323
31 Dec. 2010 26,755,405 1,430,558 28,185,963
31 Dec. 2009 28,674,660 1,609,020 30,283,680
(24) Loans and advances to customers
EUR thousand
Domestic customers
Foreign customers
31 Dec. 2010 Public sector Other Total 8,414 796,387 804,801
31 Dec. 2009 8,916 807,783 816,699
31 Dec. 2010 600,230 1,119 601,349
31 Dec. 2009 740,809 1,146 741,955
The analysis by rating category is presented in note 51.
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Annual Report 2010
(25) Allowance for impairment losses on loans and advances and other credit risk provisions
The allowance for impairment losses on loans and advances relates only to loans and advances to customers, and concerns only credit risks. The item also includes any impairment of accrued interest at the balance sheet date. No collective impairment loss has been provided. The amount of non-performing loans and advances before impairment allowances was EUR 0.22 million (2009: also EUR 0.07 million). The amount of other credit risk provisions was nil.
(26) Other financial instruments
EUR thousand Bonds and other fixed income securities Treasury bills Bonds Of which listed bonds Equity shares and other variable income securities Equity shares Investment fund units Of which listed equity shares and other variable income securities Unconsolidated companies Investments in unconsolidated subsidiaries Investments in other unconsolidated companies Total other financial instruments
31 Dec. 2010 1,051,188 543,583 507,605 1,049,497 280,114 280,114 2,374 24,919 1,536 23,383 1,356,221
31 Dec. 2009 363,247 7,203 356,044 357,767 257,166 120 257,046 2,174 25,475 1,536 23,939 645,888
Bonds and other fixed income securities as well as equity shares and other variable income securities in the amount of EUR 1,331 million (2009: EUR 620 million) are held at fair value through profit or loss. No reclassifications were made. In 2010, as part of liquidity management for the Export Financing Scheme, a liquid assets portfolio was established that had a market value of EUR 709.5 million at 31 December 2010.
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Annual Report 2010
(27) Property and equipment and intangible assets
EUR thousand
Cost at 1 Jan. 2010
Additions in 2010
Disposals in 2010
Cost at 31 Dec. 2010
Accumulated depreciation and amortisation
Net book value at 31 Dec. 2010
Current-year depreciation and amortisation
2010
Property and equipment Land and buildings Fixtures, fittings and equipment Assets under construction Intangible assets Software Assets under construction Total 93,954 71,902 22,052 2,893 2,893 96,847 2,717 972 1,745 528 408 120 3,245 (797) (797) (1) (1) (798) 95,874 71,902 22,227 1,745 3,420 3,300 120 99,294 (67,501) (50,183) (17,318) (2,311) (2,311) (69,812) 28,373 21,719 4,909 1,745 1,109 989 120 29,482 29,386 23,814 5,572 1,066 1,066 30,452 (3,713) (2,095) (1,618) (486) (486) (4,199)
Within the carrying amount of land and buildings used by the Group, the value of the land itself was EUR 4.4 million (2009: also EUR 4.4 million).
EUR thousand
Cost at 1 Jan. 2009
Additions in 2009
Disposals in 2009
Cost at 31 Dec. 2009
Accumulated depreciation and amortisation
Current-year depreciation and amortisation
2009
Property and equipment Land and buildings Fixtures, fittings and equipment Intangible assets Software Total 2,653 95,092 240 2,287 (532) 2,893 96,847 (1,827) (66,395) 1,066 30,452 1,279 32,368 (453) (4,203) 92,439 71,906 20,533 2,047 2,047 (532) (4) (528) 93,954 71,902 22,052 (64,568) (48,088) (16,480) 29,386 23,814 5,572 31,089 25,954 5,135 (3,750) (2,140) (1,610)
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Annual Report 2010
(28) Companies wholly or partly owned by OeKB AG
Company name and registered office
Banking Act category 1
Type of investment
Shareholding
Financial information
Credit Institution/ Other Company
Directly Indirectly held held
in %
Reporting Equity as date of latest defined in annual sec. 224(3) accounts UGB 2, in EUR thousand
Profit for the year, EUR thousand
Fully consolidated companies

Oesterreichische Entwicklungsbank AG, Vienna sterreichischer Exportfonds GmbH, Vienna CI CI x x 100.00 70.00 31 Dec. 2010 31 Dec. 2010 6,199 10,554 782 465
Companies accounted for under the equity method (joint ventures)

OeKB EH Beteiligungs- und Management AG, Vienna OeKB Versicherung Aktiengesellschaft, Vienna PRISMA Kreditversicherungs-Aktiengesellschaft, Vienna PRISMA Risikoservice GmbH, Vienna OeKB Sdosteuropa Holding Ges.m.b.H., Vienna OeKB Financial Services D.O.O., Belgrade Hrvatsko Kreditno Osiguranje d.d., Zagreb CCP Austria Abwicklungsstelle fr Brsengeschfte GmbH, Vienna OC OC OC OC OC OC OC OC x x x x x x x x 51.00 51.00 51.00 51.00 51.00 26.01 24.99 50.00 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 31 Dec. 2010 87,626 35,285 27,051 11,176 11,472 448 4,977 252 4,255 1,829 5,154 2,136 (28) 45 (115) (104)
Unconsolidated subsidiaries, held at amortised cost

OeKB Business Services GmbH, Vienna OeKB Zentraleuropa Holding GmbH, Vienna OC OC x x 100.00 100.00 31 Dec. 2010 31 Dec. 2010 2,121 4,266 73 2,401
Investments in other unconsolidated companies, held at amortised cost

AGCS Gas Clearing and Settlement AG, Vienna APCS Power Clearing and Settlement AG, Vienna CISMO Clearing Integrated Services and Market Operations GmbH, Vienna ECRA Emission Certificate Registry Austria GmbH, Vienna Einlagensicherung der Banken und Bankiers Gesellschaft m.b.H., Vienna EXAA Abwicklungsstelle fr Energieprodukte AG, Vienna Garage Am Hof Gesellschaft m.b.H., Vienna OeMAG Abwicklungsstelle fr kostrom AG, Vienna CEESEG Aktiengesellschaft (former Wiener Brse AG), Vienna Budapest Stock Exchange Ltd., Budapest Link-up Capital Markets S.L., Madrid
1 2
OC OC OC OC OC OC OC OC OC OC OC
x x x x x x x x x x x
20.00 17.00 18.4999 12.50 0.10 8.06 2.00 12.60 6.6046 18.35 5.90
31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009 31 Dec. 2009
2,798 2,078 2,581 290 77 1,167 4,276 5,745 276,390 20,045 5,705
(86) (241) 1,778 39 22 283 975 699 101,872 5,143 (2,061)
Other Company (OC) refers to companies that are neither Credit Institutions nor Financial Institutions by the definitions of the Austrian Banking Act. UGB refers to the Austrian Commercial Code.
OeKB EH Beteiligungs- und Management Group, a sub-group of companies which is accounted for under the equity method as a result of a joint venture agreement, had equity of EUR 103.5 million and profit for the year in 2010 of EUR 13.9 million. In the financial year, OeKB received a dividend of EUR 3,109,000 from OeKB EH Beteiligungs- und Management AG.
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Annual Report 2010
The sub-group operates primarily in the credit insurance sector. In 2010, with more than 2,500 insurance policies in force, the sub-group generated total premium income of EUR 75.0 million (2009: EUR 63.3 million). The claims ratio (claims expenses as a percentage of premium income) was 29.6% in the financial year (2009: 113.3%).
(29) Other assets
EUR thousand
31 Dec. 2010
31 Dec. 2009
Sundry assets Positive fair values of derivative contracts Prepayments and accrued income Total
14,750 4,569,118 44,919 4,628,787
9,340 1,364,287 61,178 1,434,805
An analysis of the derivative positions by remaining term to maturity is set out in note 46.
(30) Deposits from banks
EUR thousand
Repayable on demand
Other deposits
31 Dec. 2010 Domestic banks Foreign banks Total 620,627 80,788 701,415
31 Dec. 2009 543,506 114,051 657,557
31 Dec. 2010 56,025 653,733 709,758
31 Dec. 2009 174,498 148,539 323,037
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Annual Report 2010
(31) Deposits from customers
EUR thousand
Domestic customers
Foreign customers
31 Dec. 2010 Public sector Other Total 496,775 78,949 575,724
31 Dec. 2009 402,849 64,624 467,473
31 Dec. 2010 2,271 30,058 32,329
31 Dec. 2009 12,150 37,127 49,277
(32) Debt securities in issue
EUR thousand
Debt securities in issue
Of which listed
31 Dec. 2010 Bonds issued Other debt securities in issue Total 24,825,728 5,571,110 30,396,838
31 Dec. 2009 24,681,425 5,194,635 29,876,060
31 Dec. 2010 24,825,728 24,825,728
31 Dec. 2009 24,681,425 24,681,425
Debt securities in issue included EUR 18,461.4 million (2009: EUR 17,557.3 million) of liabilities at fair value through profit or loss, for which the amount repayable on maturity was EUR 16,875.1 million (2009: EUR 17,602.7 million).
(33) Provisions
EUR thousand
1 January 2010
Amounts used
Release
Additions
31 December 2010
Movement in provisions in 2010

Employee benefit provisions Other provisions Total 104,565 402,822 507,387 (4,299) (11,334) (15,633) 8,092 145,911 154,003 108,358 537,399 645,757
Included in employee benefit provisions are provisions for vacation pay and similar obligations in the amount of EUR 3.9 million (2009: EUR 3.9 million). Movements in provisions for long-term employee benefits were as follows:
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Annual Report 2010
EUR thousand
Pension
Termination benefits
Total 2010
Total 2009
Movement in non-current employee benefit provisions

Present value of defined benefit obligation (DBO), representing the total long-term employee benefit provisions at 1 January Service cost Interest cost Benefits paid Actuarial gain or loss DBO at 31 December
Long-term employee benefit provisions at 31 December
79,027 815 3,604 3,404 1,326 81,368 81,368
21,604 712 997 907 621 23,027 23,027
100,631 1,527 4,601 4,311 1,947 104,395 104,395
96,647 1,521 4,988 4,075 1,550 100,631 100,631
EUR thousand
2009
2008
2007
2006
Historical information on DBO

Pension provision Termination benefit provision Long-term employee benefit provisions 79,027 21,604 100,631 75,648 20,999 96,647 75,383 18,934 94,317 74,128 17,656 91,784
The pension provisions relate to obligations under direct pension commitments or under single-employee agreements. In the prior years, the pension obligations for a portion of the staff were transferred to a pension fund under a defined contribution plan. In connection with this, contributions in the amount of EUR 0.7 million (2009: EUR 0.7 million) were paid to the pension fund in 2010. The pension provisions include entitlements of the other employees, and of former employees who were already receiving a pension before the time of the transfer, as well as disability pension obligations in respect of all present employees. The full change in non-current employee benefit provisions is recorded within staff costs. Staff costs also included the contributions of EUR 0.1 million to the termination benefit fund (2009: EUR 0.1 million). The item other provisions at 31 December 2010 included an interest rate stabilisation provision of EUR 530.4 million (2009: EUR 392.1 million) made in order to stabilise the interest rates for the export financing scheme. Information on the measurement of this provision is provided in note 11. In the year under review, an addition of EUR 52.9 million to the interest rate stabilisation provision was made from interest income and an addition of EUR 85.4 million was made from valuation results.
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Annual Report 2010
(34) Tax assets and tax liabilities
Tax assets and liabilities respectively include deferred tax assets and deferred tax liabilities arising from temporary differences between the IFRS carrying amounts and the corresponding tax base in Group companies. No deferred taxes were recognised for any interests in companies. Deferred taxes arose on the following items:
EUR thousand Deferred tax assets Deferred tax liabilities
Deferred tax assets and liabilities

31 Dec. 2010
31 Dec. 2009 2,619 9,791 36,253

48,663 37,383
31 Dec. 2010
31 Dec. 2009 11,280

11,280
Loans and advances to banks and customers Securities Employee benefit provisions Other provisions
Total Net deferred taxes
4,069 10,117 38,899

53,085 36,979
16,106
16,106
(35) Other liabilities
EUR thousand
31 Dec. 2010
31 Dec. 2009
Negative fair values of derivative contracts Accruals and deferred income Sundry liabilities Total
2,070,576 38,351 32,688 2,141,615
1,740,916 45,484 34,316 1,820,716
Accruals and deferred income included deferrals of up-front payments received for services in connection with the export guarantee business, and deferrals related to the issue of debt securities by the Group.
(36) Capital and capital management
The share capital of EUR 130,000,000 is divided into 880,000 no-par-value shares. These registered ordinary shares with restricted transferability are represented by provisional share certificates made out in the name of each individual shareholder. OeKB AG is the parent institution of the OeKB banking group for the purposes of section 30 Austrian Banking Act. The regulatory capital resources of the OeKB Group as determined under the Banking Act shows the following composition at 31 December:
85
Annual Report 2010
EUR thousand
2010
2009
Regulatory capital requirement under section 22 Austrian Banking Act

Risk-weighted assets (based on Standardised approach to credit risk) Trading book Total risk-weighted assets Regulatory capital requirement Banking book 1 Foreign exchange risk Operational risk (Basic Indicator approach) Total regulatory capital requirement 25,451 78 24,315 49,844 32,294 2,713 24,419 59,426 318,141 318,141 403,677 403,677
Consolidated regulatory capital resources under section 24 Austrian Banking Act

Paid-up share capital Reserves (including goodwill or gains on acquisition) Minority interests Intangible assets 50% deductions under section 23(13)4a Banking Act (investments in insurance companies) Tier 1 capital Tier 2 capital (reserve for general banking risks under section 57 Banking Act) 50% deductions under section 23(13)4a Banking Act (investments in insurance companies) Total regulatory capital resources Surplus regulatory capital
1
130,000 218,522 3,026 (1,109) (8,049) 342,390 124,897 (8,050) 459,237 409,393
130,000 193,487 3,026 (1,066) (8,449) 316,998 113,906 (8,448) 422,456 363,030
8% of total risk-weighted assets.
The resulting consolidated capital ratio (regulatory capital resources as a percentage of total risk-weighted assets) at the end of the financial year was 144.4%, compared to 104.7% at the end of 2009. The consolidated Tier 1 capital ratio was 107.6%, compared to 78.5% one year earlier. The high excess cover was reflected in a cover ratio (capital resources as a percentage of the capital requirement) of 921.3% (2009: 710.9%). Section 3 Austrian Banking Act exempts OeKB AG in respect of transactions related to export promotion activities under the Export Guarantees Act and the Export Financing Guarantees Act 1981 from the requirements on solvency (under sections 22 to 22q Austrian Banking Act), on liquidity, on open foreign currency positions and on large-scale investments (under sections 25 to 27 Austrian Banking Act). The banking group as defined under section 30 Austrian Banking Act, unlike the IFRS basis of consolidation, does not include the investments in insurance companies. The strategic aim of capital management in the OeKB Group is to ensure a sustained stable capital base. There were no material changes in capital management. At all times during the reporting period, the Group satisfied the capital requirements of the national supervisor. The regulatory capital requirement for credit risk is determined in accordance with the provisions of section 22a Austrian Banking Act (Standardised approach to credit risk). The capital required to be held for operational risk is determined by the Basic Indicator approach under section 22j of the Act. The banking group does not hold a trading book. At Group level, the risks are aggregated in accordance with the concept of economic capital. Through the analysis of risk-bearing capacity, the economic capital required is compared with the economic capital available, and both measures are monitored.
86
Annual Report 2010
Other Information and Risk Report

(37) Information regarding the cash flow statement
The cash flow statement shows the cash position and cash flows of the OeKB Group. The cash position recorded, in the narrow sense, consists of cash and balances with central banks. For credit institutions, the cash flow statement has very limited relevance. The cash flow statement is neither a substitute for liquidity planning, nor is it used in managing liquidity risks.
(38) Analysis of remaining maturities
EUR thousand
Repayable on demand
Not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
Total
Residual maturities at 31 December 2010

Loans and advances to banks Loans and advances to customers Securities at fair value through profit or loss 42,320 1,772 280,115 1,490,877 331,447 40,765 7,064,029 478,289 66,511 14,715,793 204,158 537,214 4,879,323 390,484 406,696 28,192,342 1,406,150 1,331,301
Total
Deposits from banks Deposits from customers Debt securities in issue
324,207
737,843 586,046
1,863,089
645,451 4,244,948
7,608,829
5,000 5,545,432
15,457,165
7,726 14,357,604
5,676,503
15,153 22,007 6,248,854
30,929,793
1,411,173 608,053 30,396,838
Total
1,323,889
4,890,399
5,550,432
14,365,330
6,286,014
32,416,064
EUR thousand
Repayable on demand
Not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
Total
Residual maturities at 31 December 2009

Loans and advances to banks Loans and advances to customers Securities at fair value through profit or loss 10,322 19,483 257,166 1,325,947 368,919 21,400 6,115,590 464,296 64,563 21,453,600 231,828 237,027 1,388,544 474,128 40,257 30,294,003 1,558,654 620,413
Total
Deposits from banks Deposits from customers Debt securities in issue
286,971
657,557 495,791
1,716,266
304,557 4,306,961
6,644,449
15,000 2,884,673
21,922,455
15,611,986
1,902,929
3,480 20,959 7,072,440
32,473,070
980,594 516,750 29,876,060
Total
1,153,348
4,611,518
2,899,673
15,611,986
7,096,879
31,373,404
87
Annual Report 2010
The remaining maturity is the period from the balance sheet date to the contractual maturity date of the asset or liability; in the case of instalments, the remaining maturity is determined separately for each instalment. Accrued and deferred interest is assigned to the maturity class of Not more than 3 months.
(39) Loans and advances to and deposits from joint ventures, unconsolidated subsidiaries and other investees
EUR thousand
31 Dec. 2010
31 Dec. 2009
Deposits
Deposits from customers Joint ventures and unconsolidated subsidiaries Unconsolidated other companies 47,961 5,308 30,413 2,770
(40) Subordinated assets
The balance sheet contains no subordinated assets.
(41) Assets pledged as collateral
As a participant in the tenders of Oesterreichische Nationalbank (the Austrian central bank), OeKB pledged collateral in the form of bonds and other fixed income securities totalling EUR 5,111.2 million (2009: EUR 5,133.8 million). For trading on the futures exchanges in Frankfurt and London, OeKB pledged collateral in the total amount of EUR 30.4 million (2009: EUR 31.5 million). To secure credit risks in connection with derivative transactions, OeKB received collateral in the form of deposits of EUR 645.0 million (2009: EUR 145.0 million).
(42) Contingent liabilities and commitments
The off-balance sheet contingent liabilities of EUR 27.4 million (2009: EUR 16.3 million) related to a guarantee given by Oesterreichische Entwicklungsbank AG. At the balance sheet date the OeKB Group had total undrawn credit commitments of EUR 3,723.5 million (2009: EUR 2,638.7 million).
88
Annual Report 2010
(43) Sundry off-balance sheet obligations
As part of the deposit insurance system operated by the Vienna-based Banken and Bankiers GmbH, in accordance with section 93 Austrian Banking Act, OeKB and Exportfonds are required to guarantee a proportionate amount of deposits. Obligations arising under leases (all of which are operating leases) and rental agreements for 2011 amount to EUR 1.4 million (at the end of the prior year the obligations for 2010 were EUR 1.4 million). The corresponding obligations for the five-year period from 2011 to 2015 were EUR 8.3 million (at the end of the prior year the obligations for the five-year period from 2010 to 2014 were EUR 7.9 million). Rent paid for 2010 was EUR 1.4 million (2009: EUR 1.3 million).
(44) Fiduciary assets and liabilities
EUR thousand
31 Dec. 2010
31 Dec. 2009
Fiduciary positions recognised in the balance sheet

Loans and advances to banks Loans and advances to customers Other assets Fiduciary assets Deposits from banks Deposits from customers Fiduciary liabilities 15,714 990 10,157 26,861 990 25,871 26,861 16,927 990 6,000 23,917 990 22,927 23,917
Off-balance sheet fiduciary transactions amounted to EUR 17.4 million (2009: EUR 18.3 million). This item consists largely of foreign-aid credits processed on behalf of the Republic of Austria.
(45) Supplementary information on assets and liabilities under the Austrian Banking Act
EUR thousand
31 December 2010
31 December 2009
Assets Denominated in foreign currency Issued or originated outside Austria 603,000 2,434,755
Liabilities 21,069,556 28,443,750
Assets 136,842 2,710,376
Liabilities 23,090,408 30,228,774
89
Annual Report 2010
(46) Derivative financial instruments
EUR thousand
Notional amount at 31 Dec. 2010 Remaining maturity Not more than 1 year Over 1 year but not more than 5 years Over 5 years Total 2010
Positive fair values
Negative fair values
Interest rate derivatives Interest rate swaps (OTC) Currency derivatives Currency swaps (OTC)
Total
5,739,785
13,968,572
3,152,993
22,861,350
630,004
399,956
8,142,969
13,882,754
7,438,060
21,406,632
1,877,415
5,030,408
17,458,444
40,319,795
3,939,115
4,569,118
1,670,621
2,070,576
EUR thousand
Notional amount at 31 Dec. 2009 Remaining maturity Not more than 1 year Over 1 year but not more than 5 years Over 5 years Total 2009
Positive fair values
Negative fair values
Interest rate derivatives Interest rate swaps (OTC) Currency derivatives Currency swaps (OTC)
Total
2,423,047
14,724,541
3,374,708
20,522,296
504,605
388,729
4,772,127
7,195,174
8,962,011
23,686,552
2,931,132
6,305,839
16,665,270
37,187,566
859,682
1,364,287
1,352,188
1,740,916
(47) Fair value of financial instruments
The table below presents the carrying amounts and fair values of financial assets and liabilities, analysed by category. Fair values are determined as described in note 6. The market values of loans and advances to banks and customers and of deposits from banks and customers are based on inputs that in the case of assets and of liabilities are directly or indirectly observable. The same is true of the market values of derivatives reported in other assets and other liabilities (level 2). The determination of the market values of other financial instruments is based on prices quoted on an active market (level 1). No reclassifications occurred in the fiscal year or prior year.
90
Annual Report 2010
EUR thousand
Loans and receivables
Other financial instruments, at amortised cost
Financial instruments at fair value
Total 2010
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Fair value 2010

Assets
Cash and balances at central banks Loans and advances to banks Loans and advances to customers Allowance for impairment losses on loans and advances Other financial instruments Other assets
Liabilities
(224) (224) 28,192,342 1,406,150 28,899,548 1,408,050
83,060
83,060
83,060 28,192,342 1,406,150 (224)
83,060 28,899,548 1,408,050 (224) 1,367,351 4,628,787
24,920 59,669
36,050 59,669
1,331,301 4,569,118
1,331,301 4,569,118
1,356,221 4,628,787
Deposits from banks Deposits from customers Debt securities in issue Other liabilities
1,411,173 608,053 11,935,472 71,039
1,411,420 608,053 12,478,330 71,039 18,461,366 2,070,576 18,461,366 2,070,576
1,411,173 608,053 30,396,838 2,141,615
1,411,420 608,053 30,939,696 2,141,615
EUR thousand
Loans and receivables
Other financial instruments, at amortised cost
Financial instruments at fair value
Total 2009
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Fair value 2009

Assets
Cash and balances at central banks Loans and advances to banks Loans and advances to customers Allowance for impairment losses on loans and advances Other financial instruments Other assets
Liabilities
(74) (74) 30,294,003 1,558,654 31,073,527 1,559,445
189,273
189,273
189,273 30,294,003 1,558,654 (74)
189,273 31,073,527 1,559,445 (74) 657,019 1,435,904
25,475 71,617
36,606 71,617
620,413 1,364,287
620,413 1,364,287
645,888 1,435,904
Deposits from banks Deposits from customers Debt securities in issue Other liabilities
980,594 516,750 12,318,731 79,799
980,908 516,750 12,657,793 79,799 17,557,328 1,740,916 17,557,328 1,740,916
980,594 516,750 29,876,060 1,820,716
980,908 516,750 30,215,121 1,820,716
91
Annual Report 2010
(48) Risk management
Risk management essentially, the identification, monitoring, assessment, reporting, planning and treatment of risks consists of important processes designed to ensure the security and profitability of the enterprise in the interest of customers and owners. Every risk assumed by the OeKB Group must be consistent with the Executive Boards risk policy and strategy, which aims to assure a sustained stable return on equity through a conservative approach to all risks, including financial risks and risks arising from business operations in general. The Internal Capital Adequacy Assessment Process (ICAAP) implemented in the OeKB Group serves to assure the maintenance of the defined bank-specific level of capital adequacy and, as a measurement and control tool, forms an integral part of the management process. A key variable in the measurement and management of risk is economic capital; it is calculated using the concept of Value at Risk (VaR) over a one-year time horizon. In the ICAAP, credit risk, market risk, operational risk and business risk are taken into account quantitatively, through the calculation of economic capital (business risk is considered to be the risk that earnings will suffer as a result of changes in the business environment such as markets, customer behaviour or technology or of inappropriate or inadequately implemented business strategy). Liquidity risk is managed on the basis of cash-flow and funding projections (using idiosyncratic and systemic stress assumptions) that are compared critically with the counterbalancing capacity. In this context, risk essentially is defined as the danger that the actual outcome will be less favourable than the expected outcome. In other words, risk is the level of probability of a specified unexpected loss. For each risk type, the table below shows the minimum capital required under the Austrian Banking Act and the corresponding Values at Risk based on the ICAAP:
EUR thousand
Value at Risk under ICAAP
Regulatory capital requirement under section 22 Banking Act
Risk exposure and capital requirement at 31 December 2010

Credit risk Commodity and foreign exchange risk Other market risk in the banking book Other risks Operational risk
32,132 38,915 42,755 19,155 33,792 25,452 78
24,315
EUR thousand
Value at Risk under ICAAP
Regulatory capital requirement under section 22 Banking Act
Risk exposure and capital requirement at 31 December 2009

Credit risk Commodity and foreign exchange risk Other market risk in the banking book Other risks Operational risk
32,637 8,184 72,616 19,126 33,936 32,294 2,713
24,419
92
Annual Report 2010
In the calculation of risk coverage, the economic capital required is compared with the economic capital available. This is done in a multi-tier system addressing various risk coverage objectives. The available capital is allocated to market risk and credit risk in proportion to the respective economic capital required. In key areas, additional limits are in place at the operations level. Risk assessment is performed at least quarterly. Credit risks that are individually material are measured using Credit Value at Risk; individually material market risks are measured using VaR. Credit and market risks that are not individually material are assessed by allowing a lump sum for them. Other risks (including business risk) are recognised through flat percentage-based amounts. The assessment of operational risk employs the Basic Indicator approach, expanded by a distribution assumption for estimation at a high confidence level. The systems used for this purpose are SAP, Bloomberg and proprietary systems. Risk management is supported by the system of internal control, which serves to assure compliance with rules, standards and risk mitigation procedures. Extensive automated IT general controls, as well as reviews performed particularly by the Internal Audit department, contribute to the effectiveness of this internal control system. One of the priorities in 2010 was the implementation of a software solution for risk assessment and asset/ liability management, which was completed in December 2010. With this solution, all significant risk types are evaluated in a single system that also permits dynamic simulations and hence helps to achieve integrated earnings and risk management, both on a single-period and discounted multi-period basis. For 2011 it is planned to use the software permanently in this integrated risk management and to expand the analyses performed. In the area of operational risk management, in 2010 the process-oriented risk analysis and reporting was intensified in collaboration with the designated officer responsible for the internal control system as well, the Executive Board approved an internal control system policy.
Risk management organisation
Against the backdrop of the OeKB Groups major business activities and its specific business and risk structure, the bank has adopted a clear functional organisation of the risk management process; well-defined roles are assigned to the following organisational units:
Executive Board: In accordance with the responsibilities prescribed for it in the Austrian Banking Act, the Exe-
cutive Board sets the Groups risk policy and strategy. As part of the Groups enterprise-wide risk management, the Executive Board, working with the Risk Management Committee, determines the acceptable aggregate amount of risk (based on the calculated capacity to assume risk), approves risk limits derived from this aggregate and decides on the procedures for risk monitoring.
Risk Management Committee: The function of the Risk Management Committee is derived from the risk policy and consists of strategic risk control and risk monitoring. The Risk Management Committee is the primary recipient of the risk reports, monitors and manages the risk profiles for the individual risk types, and, as needed, decides actions based on the risk reports. The committee consists of the Executive Board, the Chief Risk Officer (CRO) and Deputy CRO, the Operational Risk Manager, Financial Risk Manager, internal control system officer and representatives from the Accounting department and business segments. Chief Risk Officer: The implementation of the measures decided by the Risk Management Committee is over-
seen by the Chief Risk Officer, supported by the Financial Risk Manager, the Operational Risk Manager and the Chief Information Security Officer (CISO).
93
Annual Report 2010
Risk Controlling department: The Risk Controlling department is responsible for the measurement and assessment of financial risks, the operating-level financial risk accounting and the implementation and monitoring of internal controls in respect of financial risk, including the monitoring of internal limits and the actual implementation of the Internal Capital Adequacy Assessment Process, such as the determination of the Groups aggregate risk. Operational risk management: The directions on the management of operational risk are implemented in the
Groups business operations by the Organisation, Construction, Environmental Issues and Security department (known as OBUS), with the exception of information security matters, which are the responsibility of the Chief Information Security Officer. The activities falling into the areas of operational risk management, of information security and of the internal control system officer are subject to ongoing coordination.
Asset and Liability Management Committee: Based on analysis of risks and returns, the Asset and Liability Management Committee (ALCO) defines structural targets and constraints for the business-level control units to manage the asset-liability structure of the Groups portfolios and balance sheet. Internal Audit: The organisational units involved in the risk management process and the procedures applied are regularly reviewed by the Internal Audit department. Supervisory Board: The Supervisory Board has oversight of all risk management arrangements in the OeKB
Group; it receives quarterly reports on the Groups risk situation. These risk reports present in detail the financial risk situation and the economic capital for operational risk. The Audit Committee of the Supervisory Board also monitors the effectiveness of the system of internal control.
(49) Market risk
Market risks arise from a potential change in risk factors that may lead to a reduction in the market value of the financial items. The specific types of market risk distinguished are interest rate risk, foreign exchange risk and equity price risk. The Groups market risks relate only to banking book positions, as no trading book is maintained. Risks are assessed by the Value-at-Risk concept for estimating maximum potential losses. In addition, interest rate and exchange rate sensitivity ratios are determined, and the effects of extreme market movements are calculated through stress tests using two methods. First, the economic capital determined through the ICAAP is tested under various scenarios (expected shortfall, credit migration, and correlations). Additionally, for market risks, the impact of several specific scenarios is calculated (for example, historical contingencies such as Black Monday and September 11, 2001). The largest amount of economic capital arises in connection with the Groups investment portfolio (see note 26, Other financial instruments), which at the end of the year had an asset mix of 17.3% investment funds and 82.7% bonds. Of these bonds, EUR 709.5 million served as a liquidity buffer in the Export Financing Scheme; the buffers interest rate risk is hedged by interest rate swaps. The Value at Risk of the rest of the investment portfolio is determined monthly and, at 31 December 2010, amounted to EUR 45.5 million for a holding period of one year at a 99% confidence level. The interest rate risk is also monitored by using stress scenarios. Thus, it was calculated that a positive interest rate shock of 200 basis points would have led to a change of EUR 32.0 million in the market value of the banking book. Since 2009, an external overlay manager provides additional risk management for this portfolio.
94
Annual Report 2010
Exchange rate risks exist above all in connection with raising long- and short-term funds for the export financing scheme. These risks are secured by an exchange rate guarantee of the Republic of Austria under the Export Financing Guarantees Act 1981. An interest rate stabilisation provision is maintained against interest rate risks under the Export Financing Scheme.
Hedging
To assist in controlling market risks, the Group employs derivative financial instruments. The derivatives involved are interest rate swaps and cross currency interest rate swaps, which are traded over the counter (OTC) and used largely as hedging instruments for debt securities issued by the OeKB Group. Instead of applying hedge accounting under IAS 39, these hedged financial liabilities are designated at fair value through profit or loss in order to avoid accounting mismatches. The changes in value of the derivative and of the respective hedged liability are thus recorded in the income statement.
(50) Liquidity risk
Liquidity risk is the risk of not being able to meet present or future payment obligations fully as they fall due. In the wider sense, liquidity risk also includes funding liquidity risk (the risk that funding can be obtained only on unfavourable market terms), and market liquidity risk (the risk that assets can be sold only at a discount). The goal of the liquidity strategy, which forms part of the risk policy and strategy of the OeKB Group, is to secure sufficient access to required liquidity even in difficult market situations. OeKBs decades-long excellent standing in international financial markets coupled with the high diversification of its funding instruments, and especially the Austrian government guarantee protecting the lenders, combine to facilitate market access for the Group even when markets are under special stress, as the financial crisis has demonstrated. The OeKB Groups liquidity strategy is guided by the recommendations of the Committee of European Banking Supervisors. At the core of risk measurement are cash-flow and funding projections based both on idiosyncratic and systemic stress assumptions that are set against the counterbalancing capacity (represented primarily by securities eligible for obtaining funding from central banks). Market liquidity risk is taken into account through corresponding haircuts. The survival period determined in this manner must be at least one month, although the goal is to achieve a far longer average survival period: The actual median length in 2010 was about nine months. The daily liquidity position is monitored, and is stabilised by means of a portfolio of diversified funding facilities. A detailed presentation of the liquidity situation is regularly produced and reported to the ALCO. To cover any liquidity requirements arising from potential gaps between cash inflows and outflows, the OeKB Group holds liquid assets, particularly in the form of eligible securities (securities eligible for obtaining funding from central banks). In 2010, OeKB expanded its liquidity buffer for the Export Financing Scheme through the purchase of top-rated bonds. These assets can be pledged or sold as required to meet a need for liquidity. The long-term management of liquidity is performed based on the (negative or positive) liquidity gaps identified by analysing the long-term maturity structure of assets versus liabilities.
95
Annual Report 2010
EUR thousand
Not more than 2 years
Over 2 years but not more than 5 years
Over 5 years but not more than 10 years
Over 10 years
Liquidity gaps based on long-term asset/liability maturity analysis at 31 December 2010

Liquidity gap
(990,434) (23,568)
939,934
(1,223,462)
Maturity analysis of liabilities
The tables below show the schedule of future cash outflows and inflows based on the nominal amounts of the gross transaction, i.e. without taking netting agreements into account. The mapping into time buckets is based on the contractual maturity structure; liabilities payable on demand are assigned to Not more than 1 month.
EUR thousand
Net book value
Total
Not more than 1 month
Over 1 but not Over 3 months Over 1 but not more than 3 months but not more than 1 year more than 5 years
Over 5 years
Liabilities at 31 December 2010

Deposits from banks Deposits from customers Debt securities in issue Undrawn credit commitments and offers
Total
1,411,173 608,053 30,396,838

32,416,064
1,404,827 579,131 29,473,418 3,742,846

35,200,222
1,396,841 579,131 786,432 707,878

3,470,282
3,178,001 1,152,345
4,330,346
5,427 5,486,340 980,908

6,472,675
2,559 13,994,471 861,965

14,858,995
6,028,174 39,750
6,067,924
Derivatives Outflows Inflows
2,070,576
13,877,549 12,134,670
519,864 504,294
1,271,581 1,206,543
3,977,701 3,527,644
6,090,219 5,399,408
2,018,183 1,496,782
EUR thousand
Net book value
Total
Not more than 1 month
Over 1 but not Over 3 months Over 1 but not more than 3 months but not more than 1 year more than 5 years
Over 5 years
Liabilities at 31 December 2009

Deposits from banks Deposits from customers Debt securities in issue Undrawn credit commitments and offers
Total
980,594 516,750 29,876,060

31,373,404
978,972 470,720 29,000,381 2,638,736

33,088,809
881,777 470,720 1,176,511 210,440

2,739,448
79,063 2,859,580 897,530

3,836,173
15,348 2,833,687 1,018,165

3,867,200
2,784 15,235,338 512,602

15,750,724
6,895,265
6,895,265
Derivatives Outflows Inflows
1,740,916
13,670,745 12,212,638
49,796 48,549
610,349 563,038
2,541,282 2,135,765
7,468,746 6,877,031
3,000,571 2,588,255
96
Annual Report 2010
(51) Credit risk
Credit risk is the risk of unexpected losses as a result of the default or deterioration in credit quality of counterparties. In view of its business structure, the OeKB Group distinguishes the following types of credit risk: counterparty risk/default risk, investee risk and concentration risk. The critical measure used for credit risk is Credit Value at Risk, representing the difference between an unexpected loss at a 99.99% confidence level and the expected loss associated with the respective default. The probability of default is determined primarily by mapping from the ratings supplied by external rating agencies (Standard & Poors, Moodys and Fitch). On the basis of these ratings, counterparties are classified into five internal rating categories. The data are continually updated. In the case of clients without an external rating, internally generated criteria are applied. The credit exposure of the OeKB Group consists largely of export credits. In keeping with the Groups exacting lending standards, the approval of these loans and commitments is subject to high loan security requirements (such as, notably, guarantees of the Republic of Austria). To secure credit risks in connection with derivative transactions, collateral agreements are concluded with the most significant counterparties, and downgrade trigger provisions are in place with all counterparties. These trigger clauses permit contracts to be assigned to third parties, or to be cancelled, upon a pre-defined deterioration in rating. The entire export financing scheme is treated as investee risk with its own dedicated supply of available economic capital. The distribution of assets in the banking book (including the investment portfolio) across rating categories was as shown in the table below. Guaranteed assets are, to the extent of the guarantee, assigned to the rating category of the guarantor; assets guaranteed by the Republic of Austria are assigned to rating category 1; no credit derivatives are employed.
EUR thousand
Rating category 1 (AAA)
Rating category 2 (AA)
Rating category 3 (A)
Rating category 4 (BBB/BB)
Rating category 5 (B and below)
Total carrying amount
Credit portfolio by rating category 2010

Cash and balances at central banks Loans and advances to banks Loans and advances to customers Allowance for impairment losses on loans and advances Other financial instruments Derivatives 891,179 3,542,048 61,986 636,762 132,946 390,309 267,101 (224) 3,009 (224) 1,356,221 4,569,118 83,060 27,588,223 1,363,792 436,087 167,874 35,012 86 73 7,345 83,060 28,192,342 1,406,150
97
Annual Report 2010
EUR thousand
Rating category 1 (AAA)
Rating category 2 (AA)
Rating category 3 (A)
Rating category 4 (BBB/BB)
Rating category 5 (B and below)
Total carrying amount
Credit portfolio by rating category 2009

Cash and balances at central banks Loans and advances to banks Loans and advances to customers Allowance for impairment losses on loans and advances Other financial instruments Derivatives 135,819 766,881 64,572 335,340 181,356 262,066 262,216 (74) 1,924 (74) 645,888 1,364,287 189,273 29,472,045 1,522,916 403,076 12,208 416,816 11,364 29 4,341 2,037 7,825 189,273 30,294,003 1,558,654
The table below analyses the banking book assets by country category; export credits backed by a guarantee under the Export Financing Act are included under Austria.
EUR thousand
31 Dec. 2010
31 Dec. 2009
Credit portfolio by country category

Austria EU (excluding Austria) Other countries 33,347,386 1,790,810 468,471 32,109,050 1,308,906 444,877
As at 31 December 2010 the highest exposures within the region EU (excluding Austria) were with the United Kingdom (EUR 945.9 million), Germany (EUR 420.8 million) and France (EUR 145.2 million). The highest exposures under Other countries were with the United States (EUR 404.0 million), Norway (EUR 13.0 million) and Australia (EUR 11.8 million). The Groups business operations are subject not only to the regulatory requirements but also to the volume limits set by the Executive Board for transaction types and portfolios, as well as counterparty and issuer limits that apply across business lines.
98
Annual Report 2010
(52) Operational risk
Operational risk is the risk of losses resulting from inadequacy or failure of internal processes, people or systems, or from external events, including legal risks. Standards, rules and processes are derived from the risk policy and documented in the operational risk manual. This also includes emergency management manuals and emergency plans, as well as crisis scenarios, all of which are annually reviewed. The effectiveness of these plans and procedures is tested in scenario training events. The maintenance and evaluation of the loss database on an ongoing basis helps to assure a permanent process of optimisation of operational risks. In view of the high importance of information security, the Group has a dedicated information security officer. Risk mitigation is also promoted by an effective system of internal control. In 2010 a key area of activity was the further development and refinement of a process-oriented internal control system together with the staff member responsible for this system. This further development will be extended to the subsidiaries in 2011.
(53) Staff count
During the financial year, the Group had an average of 396 employees (2009: 385 employees). The number of employees is expressed in full-time equivalents.
(54) Boards remuneration and loans
The following table gives details of the aggregate compensation of the Executive Board and Supervisory Board members and the termination benefits and pension expenses for Executive Board members, key management and other employees (including changes in entitlements and provisions). As permitted under section 266(7)b Austrian Commercial Code, the aggregate remuneration of current Executive Board members is not stated. At 31 December 2010 there were no outstanding loans to members of the Executive Board or Supervisory Board. There were also no guarantees by OeKB for these individuals. There are no management share option plans for the Executive Board or for key managers.
EUR thousand
2010
2009
Boards remuneration and loans

Aggregate remuneration Current members of the Executive Board Former members of the Executive Board Members of the Supervisory Board Pension and termination benefit expenses for Executive Board/key management Other employees 3,243 5,651 3,075 6,035 Not disclosed 136 267 Not disclosed 135 255
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Annual Report 2010
(55) Board members and officials
Members of the Executive Board Johannes Attems Rudolf Scholten
Members of the Supervisory Board Erich Hampel, Chairman Walter Rothensteiner,

1st Vice-Chairman
Staff Delegates: Martin Krull Anish Gupta Alexandra Griebl (since 14 March 2010) Christian Leicher Claudia Richter Erna Scheriau Otto Schrodt Ulrike Zabini
Franz Hochstrasser,
2nd Vice-Chairman
Government commissioners
under section 76 Austrian Banking Act
Helmut Bernkopf Peter Hofbauer (until 18 May 2010) Friedrich Hondl Stephan Koren Reinhard Ortner (until 18 May 2010) Heimo Penker Angelo Rizzuti Ludwig Scharinger (since 18 May 2010) Herbert Stepic Thomas Uher Gerald Wenzel (since 18 May 2010) Stephan Winkelmeier (until 7 June 2010) Robert Zadrazil Franz Zwickl
Thomas Wieser, Commissioner (since 1 January 2011) Alfred Lejsek, Commissioner (until 1 January 2011) Johann Kinast, Deputy Commissioner The above government commissioners are also representatives of the Austrian Minister of Finance under section 6 Export Financing Guarantees Act 1981.
Government commissioners
under section 27 of the Articles of Association (supervision of bond cover pool)
Johannes Ranftl, Commissioner Edith Wanger, Deputy Commissioner
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Annual Report 2010
(56) Other related party transactions
As a specialised institution for export services and capital market services, OeKB engages in many transactions with its shareholders. All these transactions are conducted at arms length. The following balance sheet items include transactions with shareholders of OeKB:
EUR million
31 Dec. 2010
31 Dec. 2009
Other related party transactions

Loans and advances to banks Other financial instruments Deposits from banks 23,927 81 71 25,786 36 32
(57) Date of approval for publication
The date of submission of these financial statements to the Supervisory Board for approval is 22 March 2011.
Oesterreichische Kontrollbank Aktiengesellschaft Signed by the Executive Board
Johannes Attems
Rudolf Scholten
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Annual Report 2010
IV. Auditors Report
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of

Oesterreichische Kontrollbank Aktiengesellschaft, Vienna,
for the year from 1 January 2010 to 31 December 2010. These consolidated financial statements comprise the consolidated balance sheet as of 31 December 2010, the consolidated income statement, the consolidated cash flow statement and the consolidated statement of changes in equity for the year ended 31 December 2010 and a summary of significant accounting policies and other explanatory notes. Management's Responsibility for the Consolidated Financial Statements and for the Accounting System The Companys management is responsible for the group accounting system and for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility and Description of Type and Scope of the Statutory Audit Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Groups preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Groups internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
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Annual Report 2010
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of 31 December 2010 and of its financial performance and its cash flows for the year from 1 January to 31 December 2010 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.
Report on the Management Report for the Group
Pursuant to statutory provisions, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the Companys position. The auditors report also has to contain a statement as to whether the management report for the Group is consistent with the consolidated financial statements. In our opinion, the management report for the Group is consistent with the consolidated financial statements.

KPMG Austria GmbH Wirtschaftsprfungs- und Steuerberatungsgesellschaft
Martin Wagner
ppa Renate Vala
Certified Public Accountants
103
About this report

This report is a translation of the German-language original and is provided solely for readers convenience. In the event of disagreement or dispute, only the German version of the report shall be deemed definitive. Oesterreichische Kontrollbank Aktiengesellschaft Am Hof 4 and Strauchgasse 3 P.O. Box 70 1011 Vienna, Austria Tel. +43 1 531 27-0 or ext. no. Internet: www.oekb.at Bank code number 10000 Registered office: 1010 Vienna Companies register no. FN 85749b Commercial Court Vienna UID: ATU15350402, DVR: 0052019
Owner and publisher: Oesterreichische Kontrollbank Aktiengesellschaft Editor and layout: Controlling, Reporting and Payments/ Ingrid Maygraber Copies may be ordered from Controlling, Reporting and Payments Tel. +43 1 531 27-2314 reporting@oekb.at Graphic design: Gerald Schuba Corporate Communications+, Barbara Jaumann Translation: Martin Focken Photography: Christina Husler, Vienna (Page 14) Philipp Horak, Vienna (Cover and Pages 2, 4/5, 18/19, 32/33, 58/59) Production: Grasl Druck & Neue Medien GmbH, Bad Vslau Climate neutral publication Printed on 100 % recycled paper made in Austria, carbon neutral
Information in this report is current as of 28 February 2011.
104
Am Hof 4, Strauchgasse 3 1011 Vienna, Austria Tel. +43 1 531 27- 0 www.oekb.at

OeKB Annual Report 2010

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The complete perspective.

EUR million (except lines beginning with Number of)

33,019 440 83 74 59 20.58

41,546 456 91 28 22 7.71

34,252 527 85 119 91 28.85 47.45

35,802 569 79 93 72 21.02 50.24

5,160 3,644 4 93,739 858 50,000 40,650 3,833 89 333 353

3,869 3,666 3 108,740 2 948 50,000 38,508 3,859 190 116 36

12,225 39,143 36,803 12,054 4,788

4,971 34,075 31,401 4,441 9,843

4,413 33,246 29,429 2,924 4,896

38,395 40,000 32,573 14,416

45,499 45,000 38,486 17,108

41,965 45,000 33,745 8,230

26,787 45,000 31,658 6,294

Oesterreichische Kontrollbank Aktiengesellschaft

Annual Report 2010

Why does it say The Complete Perspective on these reports?

Annual Report 2010

Letter from the Executive Board

Why does the OeKB Group offer so many different services?

Oesterreichische Kontrollbank Group

Annual Report 2010

I. General information II. Group management report for 2010

System of internal control Risk management Human resources Sustainability at OeKB

Legend for data presented in this report

Annual Report 2010

Distribution of the share capital (at 31 December 2010)

2 Strategic positioning of OeKB

2.1 Specialised services benefiting the overall economy

Annual Report 2010

Capital Market Services

2.2 Range of services

Annual Report 2010

Cooperation between the Supervisory Board and Executive Board

Annual Report 2010

Transparency and auditing

Annual Report 2010

Erich Hampel (born 1951), Vienna

Ludwig Scharinger (born 1942)

Herbert Stepic (born 1946)

Peter Hofbauer (born 1964)

Reinhard Ortner (born 1949), Vienna

Franz Zwickl (born 1953), Vienna

AGM = Annual General Meeting

Annual Report 2010

Martin Krull (born 1976)

Christian Leicher (born 1968)

Claudia Richter (born 1964)

KPMG Austria GmbH Wirtschaftsprfungs- und Steuerberatungsgesellschaft, Vienna

Ulrike Zabini (born 1959)

The term of office for employee representatives ends on 13 March 2014.

Legal Advisers Government Commissioners

(Information current as of 28 February 2011)

Annual Report 2010

5 Organisational structure of OeKB

The Executive Board is collectively responsible for

Annual Report 2010

Angle Eickhoff, Head of Department Jutta Leitner, Deputy Head of Department

Robert Anderl, Head of Department Michael Meier, Deputy Head of Department

Eveline Balogh, Head of Department Thomas Bammer, Deputy Head of Department

Josef Feldhofer, Head of Department Martina Ganzera-Veraszto, Deputy Head of Department

Werner Schmied, Head of Department Karl Lenauer, Deputy Head of Department