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Raiffeisen Bank in Hungary celebrates its 20-Year Anniversary.

Sixth-largest bank in Hungary with 430,000 customers. First chapter ofthe Raiffeisen success story in Central and Eastern Europe. Ten banksset up in the region, another ten acquisitions. Thanks to above-averagegrowth, 20,000 jobs have been created in the region. Raiffeisen verywell-positioned on growth markets.

Raiffeisen Bank Zrt. is celebrating its twentieth anniversary today witha major event in Budapest. Unicbank, as it was called then, of whichRaiffeisen Zentralbank Osterreich AG (RZB) was a co-founder, commencedbusiness activities at the beginning of 1987.The foundation of the bankmarked the beginning of Raiffeisen''s successful expansion in Central andEastern Europe (CEE). Some 10,000 visitors are expected to attendtoday''s celebrations at the Budapest Sports Arena. The show program willfeature, among others, the group Earth, Wind& Fire.

"The Raiffeisen Bank in Hungary is the nucleus of our network in CEE. Atthat time, we were the pioneers who moved into Hungary long before thechange of system in Eastern Europe became noticeable. In spite of ourlong experience in doing business in the region, founding the bank waslike jumping into cold water; yet, from the first year on, we earnedmoney," said Herbert Stepic, CEO of Raiffeisen InternationalBank-Holding AG.

Success story in Hungary

At the beginning of 1987, the Hungarian government converted the localbanking system from a mono-bank system (with the National Bank actingboth as a central bank and a commercial bank) into a multi-bank system.This made it possible to set up private banks. In the course ofpreparing this transition, in 1986 the Hungarian National Bank invitedRZB, together with Deutsche Genossenschaftsbank and the InternationalFinance Corporation (IFC), a World Bank subsidiary, to establish asubsidiary bank.

During the early years, Unicbank focused entirely on doing business withmedium-sized and large Hungarian corporate customers, as well as withsubsidiaries of international corporations. The bank developed veryrapidly, and the first branch office outside of Budapest was opened inSzeged as early as 1992. In 1994, Unicbank began to provide servicesalso to public administrations and municipal corporations. In 1995, whenthe bank launched electronic payments transactions in Hungary, italready had more than 300 staff members and seven branch offices. Thefirst Raiffeisen cash-dispensing card was issued in Hungary in 1996. Inthe same year, the bank started its Private Banking segment. As theRaiffeisen banking group had acquired the majority in the bank in themeantime, it was re-branded as Raiffeisen Bank. Parallel to there-branding, business activities with private customers and small andmedium-sized enterprises (Retail Banking) were expanded. Beginning inthat year, these operations were rolled out into the entire region. Inthe following year the staff, which had grown to comprise 900 employees,moved into the new head office in Akad?mia Street, where the RaiffeisenArt Gallery was also accommodated in 2001. The bank recorded a milestoneevent in 2003, when the 100,000th bank card was issued to a customer.

Raiffeisen Bank continues to be the largest bank in RaiffeisenInternational''s network. At the end of September 2006, the bank had abalance-sheet total of 5.75 billion euros ranking sixth on the Hungarianbanking market. More than 2,500 staff members provide services to about430,000 customers in 112 business outlets. In the meantime, the bank hasissued more than 250,000 bank cards to customers.

Ten bank foundations and ten bank acquisitions in CEE

When the political system changed throughout the region in 1989/90, RZBembarked on its further expansion covering the entire region of CentralEurope. It subsequently pursued a strategy of entering the marketsthroughout the CEE area."We accompanied the development from amono-bank system to the modern market systems that have becomeestablished today, and in many cases we actually added to the momentum,"said Stepic.

In 1991, Raiffeisen Bank Polska and Tatra banka in Slovakia werefounded. By 1998, further banks had been set up in the Czech Republic,Bulgaria, Croatia, Russia and Romania. The tenth bank– and the last one to date – was established in Serbia in 2001."In many countries we werethe first foreign bank on the market. This helped us tremendously interms of brand perception and when recruiting competent staff. Today,Raiffeisen is a leading bank brand name in CEE", added Stepic.

As of the year 2000, when the region gradually came to play a role inthe strategic plans of other banks, selected acquisitions were added tothe banks established by Raiffeisen. The first acquisition was Marketbanka in Bosnia and Herzegovina in July 2000. Banca Agricola in Romania,Hravtska Postanska Banka in Bosnia and Herzegovina, Krekova banka inSlovenia, American Bank of Kosovo, Priorbank in Belarus, as well asBanka e Kursimeve e Shqip?ris? in Albania followed in the years 2001through 2004.

The biggest acquisition by far to date came in 2005, when 93.5 per centof Bank Aval, the largest retail bank in the Ukraine, was purchased at aprice of 850 million euros. With the take-over of Impexbank at thebeginning of last year, Raiffeisen International became the largestwestern bank in Russia and the CIS. Moreover, the group''s marketposition in the Czech Republic was clearly strengthened with theacquisition of eBanka.

Altogether, Raiffeisen International acquired ten banks within less thansix years, which were all successfully integrated into the group. Inthis connection, a net amount of about 2 billion euros was invested (notconsidering follow-up investments).

Approximately 40 per cent annual growth creates more than 20,000 jobs

Today, Raiffeisen International, which has a balance-sheet total of morethan 50 billion euros, is one of the biggest international bankinggroups in the region and among the fastest-growing in the world."We canlook back on a gigantic development. In the last ten years, we grew byabout 40 per cent per year in terms of balance-sheet total, operatingprofit and profit before taxes. This is the result of our pioneeringrole in one of the fastest-growing economic areas in the world," Stepicnoted with satisfaction.

At present, Raiffeisen International has more than 52,000 staff members."We have created more than 20,000 jobs on balance since we began ourexpansion in Eastern Europe," said Stepic.

Well-positioned for the future

Today, Raiffeisen International is represented on 16 markets of theregion with subsidiary banks and leasing companies. On eight markets,the respective Network Bank is among the three largest in the country.Representative offices in Lithuania and Moldova supplement the group''spresence in the region. All subsidiary banks operate as universal bankson the local markets. More than 11.7 million customers receive bankingservices in more than 2,775 business outlets. The network of branchoffices reaches from Prague to Vladivostok on the Pacific Ocean andspans 11 time zones. Raiffeisen International thus has the biggestgeographical coverage among all international banks in CEE."Our largedistribution network, encompassing the entire area, is of greatimportance especially for retail banking which is a promising sectorcontinuously gaining in importance. This is the key to our success inthe future," said Stepic.

After China and India, CEE is the economic region with the most vigorousgrowth worldwide. The catch-up demand, which continues to beconsiderable, relates to the financial services sector in the firstplace. Although immense growth dynamics became noticeable in recentyears, current research results show that a major growth potentialcontinues to prevail for the full range of banking products. RaiffeisenResearch analysts therefore predict an average annual growth rate of thebanking markets between 14 and 22 per cent until the year 2014."It wasand is our goal to grow faster than the markets. The further we move tothe east, the less developed banking markets are. To this very day, thelarge majority of the people living in the Ukraine or Russia do not haveany bank connection at all. These are our future markets, on which weare well positioned today, like no other western bank," explained Stepic.


Raiffeisen International''s management expects annual growth of thebalance-sheet total by at least 20 per cent annually in the period to2008. The largest increases are anticipated in the CIS, partly becauseof the acquisitions made there.

The company forecasts an ROE before tax of more than 25 per cent for theyear 2009. The cost/income ratio is expected to be below 58 per cent.The management has set the target for the risk/earnings ratio at about15 per cent.

Raiffeisen International operates one of the leading banking networks inCEE with subsidiary banks and leasing companies in 16 markets. More than11.7 million customers are attended to at more than 2,775 businessoutlets. Representative offices in Lithuania and Moldova complement theGroup''s presence in the region. Raiffeisen International is a fullyconsolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB),which owns 70 per cent of the common stock. The remaining 30 per cent isfree float. The shares are traded on the Vienna Stock Exchange. RZB is aleading corporate and investment bank in Austria and the centralinstitution of the Austrian Raiffeisen Banking Group, the country''slargest banking group.

For further information please contact Michael Palzer(+43-676-86061-1504, or Lars D. Hofer(+43-676-86061-1930,,


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