Supervisory Board's Report
Supervisory Board
BAWAG P.S.K.'s Supervisory Board duly fulfilled all of its obligations as set forth in the law, in the Articles of Association and in its Rules of Procedure. In addition, regular advice and support were given to the Managing Board while at the same time the actions of the management were closely monitored. The Managing Board reported all relevant issues to the Supervisory Board in a timely and comprehensive manner.There was an open discussion in the Supervisory Board as well as between the Supervisory and Managing Board at all times. Individual issues and topics were discussed on an ongoing basis between the Chairman of the Managing Board and the Chairman of the Supervisory Board.
Supervisory Board Members
In 2009, three members resigned from the Supervisory Board. In October, the Chairman at the time, Wulf von Schimmelmann, resigned due to his obligations for other supervisory board mandates. Also, Mike Rossi and Daniel Wolf left the Supervisory Board.
I would like to use this opportunity to thank all of them for their valuable contributions to the discussions and wish them all the best on behalf of the entire Supervisory Board.
Scott Parker and myself were elected as new Supervisory Board members in the past year. I am looking forward to constructive and challenging discussions in the upcoming years.
Supervisory Board Meetings
The Supervisory Board held six meetings in 2009.
In each of those meetings, the development of business as well as of capital was discussed and an update was given on the issuance of participation capital to the Republic of Austria. The main focus of the meeting in April lay on the illustration and discussion of the Bank's financial statements for the year 2008.
The Supervisory Board was also regularly informed about the market position of the Bank, about implications for the Bank of changes in legal regulations and of personnel issues. Further, a presentation on the most significant subsidiaries, an update on issues raised in the Management Letter as well as the adoption of the updated Code of Corporate Governance and the review of the Rules of Procedure of the Supervisory and Managing Board were on the agenda of the Supervisory Board in 2009.
The committees of the Supervisory Board reported regularly on their discussions at the Supervisory Board meetings.
Meetings of the Supervisory Board Committees
The Audit Committee held six meetings in 2009. The focus of the meetings in February and April lay on the review of the financial statements of the Bank. The semi-annual report was the main topic of the meeting in August. In October, the recommendation for the appointment of the auditor was discussed, among other things. There was a quarterly report by the Bank's Internal Audit division. Further, the annual audit plan of Internal Audit and the Compliance department was presented and approved.
There were regular reports on business development as well as on issues with supervisory authorities. Additionally, the Bank's risk report, which among other things comprises the risk bearing capacity, corporate and retail risk, and market risk issues, was a regular agenda item for the Audit Committee.
The external auditors were present at all meetings and were involved in the discussions.
The Credit Committee met five times in 2009. In addition, a number of credit proposals were decided by circular resolution. Besides deciding on credit applications, the Credit Committee also discussed general credit risk topics. At the meeting in October, a focus lay on industry limits. Further, the development of the credit portfolio was monitored on an ongoing basis.
There was one meeting of the Related Parties Committee in 2009, in which a credit transaction was discussed which was subsequently decided by circular resolution. This was the only decision taken by the committee in 2009.
The Nomination Committee met three times. The main discussion topics besides the mandates of Managing Board members and succession planning were the recommendation to appoint Byron Haynes as Chief Executive Officer of BAWAG P.S.K. in August as well as the recommendation for the appointment of Sanjay Sharma in December 2009.
The Remuneration Committee held three meetings in 2009, where the remuneration, targets and contracts of Managing Board members were discussed.
Managing Board
In September 2009, CEO David Roberts had to resign due to health problems.
David Roberts had significant influence on the development of the Bank. He succeeded in building a strong senior leadership team and boosting efficiency throughout the organisation while at the same time successfully weathering the worldwide financial crisis. On behalf of the entire Supervisory Board, I would like to thank David Roberts for all his achievements and wish him the best for the future. At the same time, I would like to wish Byron Haynes all the best for the upcoming challenges in leading the Bank.
Byron Haynes, an experienced international banking expert, who has been a member of the Managing Board since August 2008, was appointed as the new CEO by the Supervisory Board. He will continue to act as the Chief Financial Officer of the Bank until an appropriate successor has been found. During his time as CFO of the Bank, Byron Haynes has managed to significantly improve the financial reporting systems in order to support the operational and financial performance of the Bank.
Joseph Laughlin resigned in December 2009 due to personal reasons. He had been Chief Operating Officer of the Bank since 2007 and was responsible for boosting process efficiency and leading the back office transformation of the Bank. Carsten Samusch declared in January 2010 that he would not be renewing his contract, which will expire at the end of May 2010. He has been the Board member responsible for Treasury since 2007. Under Carsten Samusch's leadership, the Treasury of the Bank has been successfully reorganised.
I would like to thank both Joseph Laughlin and Carsten Samusch for their valuable contributions to the Bank's development and wish them all the best for the future.
While the search for a successor for Carsten Samusch is still underway, Sanjay Sharma was appointed as Chief Operating Officer of the Bank effective 1 January 2010. He had been Managing Director of Operations since August 2008. Before that, he worked at Barclays Bank plc, where he gained international experience. Sanjay Sharma has a track record of strategy execution as well as of driving operational and structural change.
I am looking forward to the cooperation with the Bank's management team and to constructive discussions at the Supervisory Board meetings.
Annual Financial Statements
The accounts, the 2009 annual financial statements and the management report were audited by Deloitte Audit Wirtschaftsprüfungs GmbH. The audit revealed no cause for objection. The legal requirements were met in full, and an unqualified auditor's opinion was issued.
After lengthy discussion, the Supervisory Board concurred with the results of the audit, raised no objections against the annual financial statements and management report including the proposal for the appropriation of profits submitted by the Managing Board and hereby approves the annual financial statements for 2009 pursuant to section 125 paragraph 2 Aktiengesetz.
The consolidated annual financial statements for 2009 including the notes pursuant to the International Financial Reporting Standards (IFRS) and the Group management report were audited by Deloitte Audit Wirtschaftsprüfungs GmbH. The audit revealed no reasons for objection, and the legal requirements were met in full. The auditor confirmed that the consolidated annual financial statements provide a true and accurate picture of the financial position of the Group as of 31 December 2009 and of the earnings position and cash flows for the financial year started on 1 January 2009 and ended 31 December 2009 in accordance with the International Financial Reporting Standards.
The auditors also confirmed that the Group management report is congruent with the consolidated financial statements and that the legal requirements for exemption from the preparation of consolidated annual financial statements according to Austrian law have been met in full.
The Supervisory Board agreed with the opinion of the auditor after extensive discussion.
In conclusion, I would like to sincerely thank all of the Bank's employees for their hard work and dedication in 2009 in the name of the entire Supervisory Board.
Vienna, 9 March 2010
The Supervisory Board
Cees Maas
Chairman of the Supervisory Board