KOMMUNALKREDIT AUSTRIA AG PRESS RELEASE

KOMMUNALKREDIT AUSTRIA AG PRESS RELEASE
Steinbichler: “One-off effect through Greek debt writedown –
Operating result above budget”
• Kommunalkredit participates in Greek package with EUR 150 million in nominal value
• Additional provisioning requirement of EUR 142.2 million
• Bank is strong enough to bear the resulting capital charge on its own
• Operating result above budget
• Capital ratios remain satisfactory
(Vienna, 9 March 2012) – The Republic of Greece has published the result of the debt
restructuring votes under the Private Sector Involvement (PSI) programme agreed with the
Institute of International Finance (IIF) and published on 24 February 2012 today.
Kommunalkredit Austria AG (KA) has participated in the PSI programme with Greek
government bonds of a nominal value of EUR 150 million. KA has no other Greek sovereign
exposure and has not underwritten any credit default swaps (CDS).
The PSI programme basically provides for the exchange of existing bonds against new
bonds of the Republic of Greece with a haircut of 53.5% on the nominal value of the existing
bonds. Of the remaining 46.5%, 31.5% is covered by newly issued Greek government bonds
with an average maturity of 20 years and a coupon of 2% to 4% p.a.; 15% is accounted for
by newly issued bonds of the EFSF (European Financial Stability Facility) with maturities of
up to two years. In addition, a debtor warrant carrying additional interest of up to 1% p.a.,
depending on the GDP growth of the Republic of Greece, will be issued. The market
valuation of the offer ranges between 20% and 25%, not considering any ancillary costs,
such as swap unwinding fees, etc.
This measure, as well as the portfolio reduction since the 2011 Interim Report, results in an
additional provisioning requirement for KA of EUR 142.2 million for the business year 2011.
Considering the provisions of EUR 29.9 million already set up in the first half of the year, the
provisioning charge for the full year 2011 amounts to EUR 172.1 million, of which
EUR 112.5 million are realised losses resulting from the debt waiver now agreed at 53.5%.
Altogether, considering the Greece-related effect, Kommunalkredit expects to close 2011
with a negative result for the year of around EUR 120 million according to Austrian GAAP
and approx. EUR 140 million according to IFRS. The preliminary operating result, amounting
to about EUR 25 million, is above budget.
Kommunalkredit continues to have a sound capital position and will not require government
support. “Thanks to the sound capitalisation of the bank, we have the necessary strength to
assume this one-off charge ourselves”, underlines Alois Steinbichler, Chairman of the
Executive Board of Kommunalkredit. After the Greece-related effects and based on its
preliminary figures, the bank expects to report a tier-1 ratio of around 11% and a total capital
ratio of 14% as of 31 December 2011.

As regards Kommunalkredit’s strategic core business, the positive development in municipal
and infrastructure project business continued despite the difficult economic environment. “We
have been able to broaden our customer base in the municipal and infrastructure-related
sectors to a satisfactory extent and are cooperating successfully with project developers and
operators”, says CEO Steinbichler.
Kommunalkredit offers its customers tailor-made services in its Social Infrastructure,
Energy & Environment and Transport segments. “As we can see clearly, our project-related
approach is continuously gaining in importance in view of increasing public budget
constraints”, concludes Alois Steinbichler.
For enquiries:
Kommunalkredit Austria
Cornelia Schragl-Kellermayer (Communication & Marketing)
Phone: +43 (0)1/31 6 31-532 or +43 (0)664/80 31631 532
mailto:c.schragl@kommunalkredit.at; www.kommunalkredit.at