In Central and Eastern Europe we operate as a bank with an extensive network in the eastern part of the European Union and the adjoining countries in South-East Europe. We aim to make available the financial infrastructure for the increasingly intensive economic relations between the various European regions. Apart from serving multinational companies, we also want to use the large potential for business with private customers.

Private customers
In those countries where we do not yet have a country-wide network of branches we use a mobile sales force to offer our services. We will continue to win business in potential market niches with products that give us a competitive advantage. These business areas include the booming market for mortgage loans, mutual funds, credit and debit card business, as well as asset management and private banking services. The wide range of products enables us to engage in intensive cross-selling activities.

Corporate customers
At present we are the main bank of account for many internationally operating companies which enter the markets of Central and Eastern Europe. Through intensive business relationships with these customers, we have gained know-how which we will increasingly use to support medium-sized companies in their expansion into CEE. But our services are not a one-way street from West to East. We also provide assistance to CEE companies expanding into the EU markets and other CEE countries. At our CEE banking subsidiaries we have established European Competence Centres, which support companies in the new EU member states by providing them with information on EU assistance programmes.

Our objective is to be a one-stop shop used by corporate customers for the handling of their financial transactions. For this purpose we have set up a customer relationship management system for cross-border clients. We also offer specific network products to this customer group. Such network products will be available as from 1 May 2004: “FlashPayment” for quick transfers between HVB Germany, Bank Austria Creditanstalt and its banking subsidiaries, and cash management solutions across the entire region.

Standardisation of products
Our international customers attach great importance to being provided with quick, secure and efficient financial services that meet their needs – no matter in which country these needs arise or have to be met. We meet our customers’ requirements by stepping up the standardisation of products and services across national borders. The industrial sector has made fast progress in this area: for example, companies in the automotive industry use just a few “platforms” to make different versions of their cars and then offer these products to their customers with different additional features.

On this model, a bank that is responsible for operations in eleven countries in Central and Eastern Europe can offer a uniform range of core products with country-specific extras as required. While offering a range of core products, we also respond to individual needs: standardised products are the basis on which customised services can be provided at lower cost.

Division of tasks within the Group
To benefit from a division of tasks within the Bank Austria Creditanstalt Group, we will use location-specific advantages. For example, the processing centre for credit card business in the Czech Republic, Slovakia and Hungary is located in Prague. We are planning to set up a similar processing centre for South-East Europe in Split (Croatia). This means that we will bring together processing activities for defined regions or several countries, rather than centralising all of them in a single location. Economies of scale resulting from this approach will also have a positive impact on our cost structure.

Customers will benefit from the higher level of efficiency achieved through a better division of tasks. While downstream settlement and processing activities will be concentrated at a few locations, local account managers will remain the first point of contact for customers.

Network expansion
In Poland, Croatia and Bulgaria, we already operate as a universal bank with an extensive branch network. In other countries we will continue to pursue organic growth while also examining opportunities for acquisitions – after all, on our way to becoming the leading bank in CEE, we have also acquired local banks and integrated them in our network. Wherever opportunities for acquisitions arise in the course of the privatisation process, or as the result of a reorganisation of operations among foreign banks, we will take a close look at such opportunities. The required funds are available to the bank from the capital increase carried out in July 2003.

Success in CEE
Our product offering in Central and Eastern Europe meets with a high level of acceptance. This can be seen from the increase in the total number of customers from 3.5 million at the end of 2002 to some 4 million at year-end 2003. Our commitment has been recognised by renowned business magazines: “The Banker” has named us “Bank of the Year in CEE” for the third time, and “Global Finance” and “Euromoney” have awarded us the title “Best Bank in CEE”.

We are well on our way to becoming an essential partner for all the financial needs of private and corporate customers in Central and Eastern Europe.