Bank für Tirol und Vorarlberg : Annual Report 2021

BANK FÜR TIROL UND VORARLBERG AKTIENGESELLSCHAFT

ANNUAL REPORT 2020

Annua Report

Contents

	Group
4	Preface from the Executive Board	20	History
6	Strategy 2030	22	Heads of BTV head office and markets
8	Highlights 2020

	Management report
28	Economic environment	41	Report on the internal control system for the financial
31	Business development		reporting process
39	Compliance and anti-money laundering	43	Shares and shareholder structure
40	Non-financial report	45	Outlook

	Consolidated financial statement
47	Consolidated financial statement 2020	201	Declaration by the statutory representatives
50	Balance sheet	202	Report from the independent auditors
51	Comprehensive income statement	208	Report from the Supervisory Board
52	Statement of changes in equity
53	Cash flow statement	211	Imprint
54	Annex BTV Group 2020

Important dates for BTV shareholders
Annual General Meeting	07/05/2021, 11:00 a.m., Stadtforum 1, Innsbruck (held virtually)
	The dividend will be published on the BTV homepage and in the gazette
	of the Wiener Zeitung the day after the Annual General Meeting.
Ex-dividend date	14/05/2021
Payment of dividend	18/05/2021
Interim Report as at 31/03/2021	Published on 28/05/2021 (www.btv.at)
Half-Year Financial Report as at 30/06/2021	Published on 27/08/2021 (www.btv.at)
Interim Report as at 30/09/2021	Published on 26/11/2021 (www.btv.at)

2 BTV Annual Report 2020

BTV Group at a glance

Profit and loss in EUR million	31/12/2020	31/12/2019	% change
Net interest income	130.9	139.9	-6.5%
Risk provisions in the credit business	-47.3	-0.9	>+100%
Net commission income	54.6	49.4	+10.4%
Revenue from companies valued at equity	30.2	53.0	-43.1%
Operating expenses	-187.1	-191.1	-2.1%
Other operating income	72.3	83.8	-13.8%
Annual net profit before tax	54.1	144.5	-62.5%
Group annual net profit	53.0	126.7	-58.2%

Balance sheet figures in EUR million	31/12/2020	31/12/2019	% change
Balance sheet total	13,969	12,549	+11.3%
Loans to customers after risk provisions	8,026	7,938	+1.1%
Primary funds	9,649	8,937	+8.0%
of which savings deposits	1,531	1,391	+10.1%
of which own issues	1,390	1,421	-2.2%
Equity	1,787	1,749	+2.1%
Managed deposits	16,438	15,717	+4.6%

Regulatory capital (CRR) in EUR million	31/12/2020	31/12/2019	% change
Total amount at risk	7,866	8,300	-5.2%
Capital	1,317	1,293	+1.9%
of which common equity (CET1)	1,086	1,087	-0.1%
of which total core capital (CET1 and AT1)	1,086	1,087	-0.1%
Common equity Tier 1 ratio	13.8%	13.1%	+0.7 pp
Core capital ratio	13.8%	13.1%	+0.7 pp
Equity ratio	16.7%	15.6%	+1.1 pp

			Change in
Key indicators in pp	31/12/2020	31/12/2019	percentage points
Return on equity before tax (RoE)	3.1%	8.5%	-5.5 pp
Return on equity after tax	3.0%	7.5%	-4.5 pp
Cost/income ratio	64.8%	57.9%	+6.8 pp
Risk/earnings ratio	36.2%	0.7%	+35.5 pp

Number of resources	31/12/2020	31/12/2019	Change figure
Weighted average number of employees	1,414	1,455	-42
Number of branches	35	36	-1
Key indicators for BTV shares	31/12/2020	31/12/2019
Number of ordinary no par value shares	31,531,250	31,531,250
Number of preference shares	2,500,000	2,500,000
Highest price of ordinary/preference share in EUR	30.20/27.80	29.60/28.00
Lowest price of ordinary/preference share in EUR	26.80/24.80	23.80/21.80
Closing price of ordinary/preference share in EUR	30.20/27.20	29.00/26.60
Market capitalisation in EUR million	1,020	981
IFRS earnings per share in EUR	1.58	3.65
P/E ratio, ordinary share	19.1	7.9
P/E ratio, preference share	17.2	7.3

Group

Management Report

Consolidated Financial Statement

BTV Annual Report 20203

Preface from the Executive Board

Ladies and Gentlemen,

In 2020, in addition to many other important tasks, we faced two major issues. Number one was the COVID-19 crisis, which we have not yet left behind. When the pandemic reached Austria and the first lockdown was just around the corner, the immediate concerns were the safety and health of both our employees and our customers. The implemented measures have proven successful.

We found new ways to stay close to our customers despite "social distancing" and in doing so took care of the urgently needed liquidity. The funding and deferrals we provided for private individuals and companies amounted to EUR 437 million. The high level of customer focus at BTV is also reflected in the increase in primary funds of EUR 712 million, thereby increasing the level of managed deposits to EUR 16,438 million. Particularly in times of crisis, it is important to position yourself as a reliable partner. We are very pleased with the positive feedback we have received from our customers in this respect.

At the same time, our share price rose by +4.1% to EUR 30.20, continuing its reliable performance in 2020. The average over the past 5 years is +8.3% p.a.* It is a result that is not to be taken for granted in times like these and that confirms our work.

Our second major task in 2020 was implementation of our new BTV Strategy 2030. The design strategy is based on the motto "Future-ready. Values. Creativity." and encompasses the five action points of employees, customers, digitalisation, culture and organisation. To ensure that our strategy is put into practice and supported by all employees, we have developed it in a broad manner and conveyed it comprehensively right from the start.

Gerhard Burtscher

Chairman of the Executive Board

As many people as possible were involved and the results were communicated in a completely new format - the BTV Future Forum. This lets us make the strategy tangible for everyone, not with hard figures but instead with experiences that appeal to the head and heart.

In 2020, the attack by UniCredit on the independence of BTV and its two sister banks Oberbank AG and BKS Bank AG continued with undiminished vigour. We are therefore all the more pleased with the further victories that we were able to achieve this year - especially with two rulings from the high courts that fully confirmed the legal positions of BTV. We hope that this development will lead to a rethink on the part of UniCredit and we are ready to work together to develop a solution, provided that BTV and the 3 Banken Group remain independent.

There are not many who are sad to see the past year gone. But what happens next? The crisis still has its grip on us and, in addition to a lack of planning certainty, vaccinations for the population have also been slow to roll out. Until vaccination progresses satisfactorily and we can plan with certainty, the economic outlook is very challenging. Nevertheless, we remain confident and optimistic. As soon as there is sufficient immunisa- tion and planning certainty, the economy will recover rapidly; we are convinced of this. And we are expecting to be able to look back positively on the coming year together with our employees, customers, guests and partners.

We would like to take this opportunity to express particular gratitude to our employees. In difficult times, they have shown once again how much commitment and devotion they have. Whether working from home or increasing their workload - they overcame the challenges of 2020 with flying colours. Without them, the successes we have seen despite all the obstacles would not have been possible.

• Source: Bloomberg, as at: 31 December 2020; BTV share performance over the last 5 years as at the reporting date: 31 December 2016: -0.43%, 31 December 2017: +10.73%, 31 December 2018: +5.36%, 31 December 2019: +23.17%, 31 December 2020: +4.14%; past performance does not guarantee future events or performance. The listed performance is reduced by entry and exit fees and ongoing costs of up to 1.48% p.a. With an assumed investment sum of EUR 10,000, this would be EUR 148.00 p.a. for
  the 5 years.

Chairman of the Executive Board Gerhard Burtscher

BTV Annual Report 20205