Statement by the
Chairman of the Board
2003 was a difficult year from a global economic perspective. During the first semester, in particular, there were no noticeable signs of an upturn. In the euro area, interest rates were extremely volatile and partly dropped to historically low levels. The economic activity only picked up towards the end of the year, leading also once more to a steeper interest-rate curve. We succeeded, nevertheless, in achieving a good result for the Group, despite these difficult overall economic conditions.
A change in the leadership of our Group took place in April of the year under review. Helmut ELSNER, Chairman of the Board and Chief Executive Officer, took his well-deserved retirement after 48 years of successful work for our bank.
In spite of internal restructuring measures, our customers and their needs were again in the foreground during 2003. With great energy and perseverance BAWAG and P.S.K. pursued their ambitious objective to position themselves as the most customer-friendly ban- king group. In June 2003, for example, our ultra-modern technology center at Buchengasse in Vienna's tenth district was inaugurated which, inter alia, accommodates our IT/computer center, as well as our newly founded company for handling payment transactions. The BAWAG Allianz staff pension fund was also off to a good start. It succeeded in establishing its position both on the employer and on the employees' side and in obtaining a market share of 17%.
During the year under review, we took a great step forward in the direction of reaching our goal, namely to offer all customers the best service. In September 2003 we reached the first milestone on our road to "allegro", the future-oriented new core banking system. By the end of 2004, it will completely replace the previous system of BAWAG. As of 2005, BAWAG and P.S.K. will have a uniform IT platform, which will make it possible to service all our customers on a mutual basis in 1,800 offices.
We continued our international strategy by opening a 100% subsidiary in Malta, which strengthens the presence of our Group outside of Austria in yet another designated EU member - after the Czech Republic, Hungary and the Slovak Republic. By completely taking over Interbanka, which specializes in commercial customers and real- estate financing operations, as well as export and trade financing, we continued to pursue our strategy for Central Europe. Based on the model of Istrobanka, our 100% subsidiary in Slovakia, the retail business will be stepped up at Interbanka. We are confident that the subsidiary banks in Central and Eastern Europe will experience a dynamic development, especially with regard to retail customers and will continue to enhance the good earning potential of our group.
Last but not least, I would like to take this opportunity to thank all staff members - without their indefatigable commitment it would have been impossible to cope with all the challenges of the year under review. They were exposed to extraordinary stress, especially in the course of introducing "allegro", our new core banking system; yet, they nevertheless made it possible for us to win market shares in many segments.
I also gladly take this opportunity to extend special thanks to our customers and the friends of our Group for their confidence and loyalty, as well as to our shareholders for their support.
Johann Zwettler
Chairman of the Board and Chief Executive Officer