Bancherul - BANCI / ENGLISH / Raiffeisen Bank International officially commences its business activity

- Merger process completed and effective with entry in commercial register
- Smooth transition for clients, business partners and investors
- RZB continues to be the central institution of the Austrian Raiffeisen Banking Group and group head office for the entire RZB Group

Today's official start of business activity for Raiffeisen Bank International (RBI) strengthens the market position of RBI, which is the most significant participation in the group headed by Raiffeisen Zentralbank Österreich AG (RZB), and marks the successful conclusion of a future-oriented restructuring process. The merger of Raiffeisen International Bank-Holding AG (Raiffeisen International), now RBI, with the spun-off principal business areas of RZB has become effective with its entry in the commercial register of the Vienna Commercial Court (Handelsgericht Wien).

"By taking this step, we have optimized RZB's group structure and ensured that the entire Group is ideally positioned for the future. Customers will benefit from being able to access our bundled product and service competence from a single source, and the step also makes it easier for RBI to access the debt and capital markets. Last but not least, we have managed to ensure that an Austrian majority shareholding can be maintained in this successful internationally-active banking group over the long-term," said Walter Rothensteiner, CEO of RZB and Chairman of the Supervisory Board of RBI.

"RBI will bring together the strengths of Raiffeisen International as a leading banking group in Central and Eastern Europe and those of RZB as a top product developer with an excellent positioning in the corporate business segment," said Herbert Stepic, CEO of RBI. "This merger strengthens us to the benefit of our clients and business partners, both of whom will profit from our optimized offering of products and services."

RBI brings under one roof all of the markets previously addressed by Raiffeisen International and RZB, namely, its corporate customer business in Austria and its extensive network of banking and leasing subsidiaries in Central and Eastern Europe, complemented by corporate customer business in Asia and the world’s financial centres. RBI remains a part of the RZB Group, which is steered by RZB, the central institution of the Austrian Raiffeisen Banking Group.

A good merger starts with a good deed

RBI's Managing Board decided to use the occasion of the official start of the company's business activity to show support for two charitable organisations. The beneficiaries of this initiative are the Austrian Red Cross and the charity "kleine herzen", with whom the CEE Charity founded by Herbert Stepic has already successfully jointly implemented several projects for children in need in Central and Eastern Europe. Fredy Mayer, president of the Red Cross, and Pascale Vayer, chairwoman of "kleine herzen", together received a cheque in the amount of 31,000 euros, which will be split between the two organizations. The number 31,000 stands RZB's former sort code, which has now become RBI's sort code, symbolizing the continuity in client relationships. "Like RBI, both the Red Cross and kleine herzen have strong Austrian roots that are paired with a far-reaching international engagement," said Herbert Stepic, alluding to the Red Cross’s aid activities in Pakistan, which will be the beneficiary of the funds donated to the Red Cross.

Smooth transition for RBI clients, business partners and investors
In accordance with Austrian law, RBI as the acquiring entity is the universal successor with regard to the spun-off principal business areas of RZB. For customers, this means that the business relationships taken over by RBI will be maintained without any changes.

Customer accounts that previously existed at RZB have been transferred to RBI, with their account numbers and IBANs remaining unchanged. The same is true for the sort code 31,000 and the SWIFT Code (BIC) RZBAATWW. Customers and business partners will be able to reach their contact persons at RBI under the same telephone and fax numbers as before the merger's completion. Like RZB, RBI has its headquarters at "Am Stadtpark 9, 1030 Vienna".

What is new is RBI's homepage (http://www.rbinternational.com), which provides detailed information about the company's business segments and the Group's worldwide network, as well as investor information.

To facilitate the merger, a capital increase was agreed to at Raiffeisen International; that capital increase has now also become effective with the merger's entry in the commercial register. Consequently, RBI's free float amounts to around 21.5 per cent, while it had previously amounted to about 27.2 per cent for Raiffeisen International. RZB's indirect shareholding in RBI amounts to around 78.5 percent.

RBI remains listed on the Vienna Stock Exchange. Those shares that have been newly issued for the implementation of the merger are expected to be listed on the Vienna Stock Exchange for the first time on 13 October 2010. On the same day, the name change from Raiffeisen International to RBI will also be undertaken by the Vienna Stock Exchange.

RZB retains its name and continues to be the central institution of the Austrian Raiffeisen Banking Group and the group head office for the entire RZB Group. While RZB's internet domain remains unchanged, its sort code will from now on be 30,000 and its SWIFT Code (BIC) RZBHATWW.

Merger out of strength

As both Raiffeisen International and RZB held their ground even during the depths of the global economic and financial crisis and managed to remain profitable, the merger resulting in RBI took place out of a position of strength. A large number of reasons existed for merging Raiffeisen International with RZB's principal business areas. These include the fact that the merger provides RBI with an optimized access to refinancing and capital, enabling RBI to take full advantage of the renewed strength of economic growth in Central and Eastern Europe. RBI received a banking license as a result of the merger.

In addition, the merger brings together Raiffeisen International's strong distribution network of around 3,000 outlets in 17 CEE markets with RZB’s excellent product know-how in the field of high quality financing and capital products for commercial customers, financial institutions and sovereigns. More generally, the merger makes possible a sensible reallocation of resources towards the CEE markets with sustainable growth. Also, RBI is perfectly positioned for future growth on the basis of the fact that it is both a leading bank in CEE and the Austrian bank with the strongest presence in Asia's emerging markets.

Raiffeisen International and RZB first informed the public in February that they were taking a closer look at a possible merger of the two companies as a strategic option. Over the course of the following months, these considerations became more concrete and the valuation results that had been reached by two renowned accounting firms and formed the basis for the merger were confirmed. Based on these results, which were also supported by fairness opinions from leading investment banks, the Managing Boards of both entities agreed on an exchange ratio for Raiffeisen International and the merger-relevant parts of RZB. At the beginning of July, the annual general meetings of the shareholders of the involved companies approved the transaction, with each providing the requisite three-quarters majority. During the third quarter, the merger was put forward for the entry in the commercial register. The merger, as well as the capital increase and name changed required for its implementation, have now been entered into the commercial register.

Raiffeisen Bank International starts with attractive financials
The following pro forma figures for Raiffeisen Bank International (RBI) result from merging Raiffeisen International with the principal business areas of RZB. For the first six months of 2010, Raiffeisen Bank International's profit before tax amounted to € 579 million, while its consolidated profit (after tax and minorities) was € 472 million. RBI's provisioning for impairment losses stood at € 608 million.

RBI's net interest income amounted to € 1,780 million. Its general administrative expenses were € 1,425 million, while its profit from operating activities stood at € 1,261 million. On the basis of the pro forma results for the first two quarters of 2010, the new bank had a cost/income ratio of 53.0 per cent.

RBI's pro-forma balance sheet total as per 30 June 2010 stood at € 147.9 billion, which represents an increase of 1.3 per cent since the end of 2009 (31 December 2009: € 146 billion). RBI's return on equity before tax stood at 12.2 per cent. On the basis of the pro forma figures, RBI's core capital ratio (tier 1), credit risk stood at 12.0 per cent (up 0.2 percentage points compared to year-end 2009), while its core capital ratio (tier 1), total stood at 9.5 per cent (up 0.1 percentage points). RBI's core tier 1 ratio (core capital less hybrid capital based on total risk) stood at 8.7 per cent (up 0.2 percentage points compared to year-end 2009).

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Raiffeisen Bank International AG (RBI) regards both Austria, where it is a leading corporate and investment bank, and Central and Eastern Europe (CEE) as its home market. In CEE, RBI operates an extensive network of subsidiary banks, leasing companies and a range of other specialised financial service providers in 17 markets. 56,000 employees service about 15 million customers through around 3,000 business outlets in the region.

RBI is the only Austrian bank with a presence in both the world’s financial centres and in Asia, the group's further geographical area of focus.

RBI is a fully-consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB). RZB which indirectly owns around 78.5 per cent of the common stock, which is listed on the Vienna Stock Exchange; the remainder is in free float. RZB is the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group, and serves as the group head office of the entire RZB Group, including RBI.