Letter from the Chairman of the Supervisory Board

Ladies and Gentlemen,

With the establishment of an investment bank concentrating on international business 150 years ago, the foundation stone was laid for Bank Austria Creditanstalt. The strategy at that time was to open up Central and Eastern Europe from Vienna – the targets were ambitious. In Europe it was necessary to develop infrastructure, build railway lines, finance expansion
of industry, and support flourishing trade and commerce.

Today, a century and a half later, we can see that Bank Austria Creditanstalt has implemented the idea of its founding fathers to their complete satisfaction. This idea found much favour with investors at that time – in November 1855 the police had to cordon off several streets because the run of shareholders was so great on the occasion of the first issue of shares.

Our bank’s development has been very eventful during this long period. This is equally true for the development of our company – Bank Austria Creditanstalt has, after all, evolved from the step-by-step integration of three heterogeneous banking institutions – and for the development of our country. I think that we can really be proud of what has been achieved:

• With Bank Austria Creditanstalt, Austria now has a bank of European stature which stands for modernisation and progress in its market of origin;
• With its extensive network in Central and Eastern Europe, Bank Austria Creditanstalt is one of the top institutions, thus fulfilling an important economic function for Austria as well as for EU accession countries and accession candidates;
• Bank Austria Creditanstalt partners Austrian companies throughout the world and has a product competence matching that of any other major international bank;
• Bank Austria Creditanstalt is a company with a combined staff of 29,000 in Western Europe and Central and Eastern Europe
• and it is a listed company which is competitive on the internal market and well equipped for the future, with shareholders’ equity of € 6.6 bn.
  

2004 therefore proved that Bank Austria Creditanstalt can successfully implement its vision as the Bank of the Regions, as one of the major players in CEE. What happens next?

You can only take major steps forward if you set yourself ambitious targets. In concrete terms: Bank Austria Creditanstalt will continue to grow. The bank wants to become the market leader in CEE and close the gap between the profitability of Austrian business and the benchmarks, thus increasing the return on equity after taxes to 15% by 2007. The fact that this is expected by the market is seen in the steep rise in the share price, which has increased the bank’s
market capitalisation to about € 11 bn.

The prospects are good that the bank will fulfill the high expectations placed in it.
I wish Bank Austria Creditanstalt continued successful development and also the necessary good luck!

Yours sincerely,

Gerhard Randa