Association ofAssociation ofVolksbanks

December 2016

Overview Association, Volksbank Wien

Association of The Association of Volksbanks currently consists of 15 primary

M d ‘ R ti

Association of Volksbanks institutions (regional Volksbanks and specialized banks). Central

organization of the Association is Volksbank Wien AG.

Long Term Bank Deposit Rating: Baa2Outlook Bank Deposit Rating: Stable

Moody‘s Rating(Volksbank Wien)

Long Term Issuer Default Rating (IDR): BB+Fitch Ratings(Association)

Long Term Issuer Default Rating (IDR): BBOutlook IDR: PositiveCovered Bond Rating: BBB+Outlook Covered Bond Rating: Positive

Total assets: EUR 27 4 bnAssociation

Assets & Capital1)

Total assets: EUR 27.4 bn.Risk-weighted assets (total risk): EUR 14.7 bn.CET1 ratio (total risk): 11.7%Equity ratio (total risk): 14.8%

Volksbank WienAssets & Capital1)

Total assets: EUR 10.1 bn.Risk-weighted assets (total risk): EUR 3.0 bn.CET1 ratio (total risk): 12.8%Equity ratio (total risk): 13.1%

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1) As of 30 September 2016

Association of Volksbanks:current structure

A i ti f V lk b k

15 primary banks ca. 93,000 commercial customers (predominantly SME) ca. 1.1 million private customers

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Association of Volksbanks

Primary banks1)

12 Regional Volksbanks (a restructuring process is currently being implemented: by mid-2017 the number of primary banks will decrease to 8 regional Volksbanks and 2 specialized banks through mergers in the sector)

3 Specialized banks (Apothekerbank, Ärztebank, Sparda Bank Austria) g sy

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15 Primary banks

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Volksbank Wien AG

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Volksbank Einlagensicherung eGDeposit protection (Einlagensicherung) of the Association of Volksbanks

Is one of the regional Volksbanks and central organization (CO) of the Association of Volksbanks

The regional Volksbanks and specialized banks have established an Association of Credit Institutions according to section 30a, Austrian Banking Act (Association of Volksbanks) in 2012 based on a joint liability scheme and a joint liquidity scheme.

1) As of 12/2016 2) The central organization Volksbank Wien is audited by KPMG

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Association of Volksbanks:key aspectsy p

Joint liability The CO Volksbank Wien and the regional Volksbanks have established a joint Joint liability scheme liability scheme. They are mutually obliged to jointly support a member institution

should difficulties arise. Liabilities and contributions are unlimited.

Joint liquidity The central organization and the Volksbanks form a strategic liability and fundingJoint liquidity scheme

The central organization and the Volksbanks form a strategic liability and funding scheme. The Volksbanks have to hold their liquidity at the CO, the CO is responsible for the Association’s compliance with regulatory liquidity requirements.

The CO is in charge of the Association’s equity capital planning; the centralManagement of capital and risk

The CO is in charge of the Association s equity capital planning; the central organization and the other Volksbanks are subject to common principles of risk management which are defined in an annual centralized planning process.

Right to issue directives

The central organization is authorized to issue general or individual directives to the Volksbanks. General directives are aimed at all Volksbanks while individual directives are issued to specific banks.

Planning processThe central organization is responsible for the Association’s planning process, forcontrolling and reporting, as well as for an optimization of the IT, marketing and organization business areas.

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Association‘s governance

LIABILITY SCHEME

Legally required deposit guarantee

VOLKSBANK WIEN AG (CO)

Sole responsibility for tasks according to § 30a, Austrian Banking Act

Cooperation agreement

VEGVolksbank

Einlagensicherung eG

• Management via issuance of directives• Performance of control functions VBVM

Volksbanken-Vertriebs- undEinlagensicherung eGDeposit guarantee,

investor compensation

ÖGV and VEG jointly perform tasks i l ti t th l i

Volksbanks "8 + 2"

Volksbanken Leistungsfonds

Volksbanken Vertriebs und Marketing eG

Responsible for the i l t ti f thin relation to the early warning

system (§ 61, Austrian Banking Act)

• The governance structure of the Association of Volksbanks has been optimized and was approved by the

Trust fund within the consolidation group implementation of the cooperation agreement

The governance structure of the Association of Volksbanks has been optimized and was approved by the regulator on 01 July 2016. The main modifications are a change in the support mechanism (instead of Volksbank Haftungsgenossenschaft eG now the central organization is responsible for providing support or implementing recovery procedures if needed by any of the Volksbanks) and the establishment of a trust fund.

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Liability scheme, VEG, VBVM,

• The Association contract forms the basis of the liability scheme and determines LIABILITY SCHEMEthe central organization’s responsibilities (tasks according to § 30a, Austrian Banking Act). The central organization performs significant control functions (management of equity, liquidity and risk, internal organization & IT, planning process), is responsible for the compliance with regulatory requirements and has the right to issue general and individual directives.

Central organizationSole responsibility for tasks

resulting from § 30a as t e g t to ssue ge e a a d d dua d ect es

• The Volksbanken Leistungsfonds is a trust fund established in order to provide funds for the potential support or recapitalization of Volksbanks in order to prevent a threatening deterioration of earnings, financial position, capital structure or liquidity situation

Volksbanken Leistungsfonds

structure or liquidity situation.

• Volksbank Einlagensicherung eG (VEG) provides the legally required deposit VEG guarantee and investor compensation for the Volksbank sector.VEG

• Volksbank Vertriebs- und Marketing eG (VBVM) is responsible for theVolksbank Vertriebs- und Marketing eG (VBVM) is responsible for the implementation of the cooperation agreement. Main tasks include the promotion of cooperation in sales activities and the harmonization of processes.

VBVM

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Eight regional banks willbe formed through mergers

VolksbankNiederösterreich

Volksbank

Year of last merger taking place

T t l t f V lk b k (i l di t f b k t

g g

Volksbank Oberösterreich

Volksbank Wien

2.2

Total assets of Volksbanks (including assets of banks to be merged), in EUR bn., as of 30 September 2016. Volksbank Wien: assets excluding central organization function

2017

2017

VolksbankS l b

3.3 4.9

2.2

VolksbankVorarlberg Volksbank

Tirol

Salzburg

2017

2.6

Volksbank

2.4

3.0

1.3

2.7

Specialized institutions

Sparda Bank Austria

Ärzte-/Apothekerbank

0.9

1.0 2017

VolksbankSteiermark

VolksbankKärnten

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Contents

Overview and governance

Loans and advances to customers and NPL

Liquidity and funding

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Loans and advances to customers

Distribution of loans and advances to customers (EUR bn.)1)

10,7

789

1011

7,2

5,5

234567

1,3 0,80.6 0.4

012

• The volume of the Association’s loans and advances to customers was EUR 26.5 bn. as of 30 September 2016.

• Focus on Austria: As of 30 September 2016 Austria accounted for ca. 94% of loans and advances to customers, followed by Germany (ca. 3%) and Switzerland (ca. 1%).

1) Based on total credit lines extended. As of 30 September 2016Definition Corporate: operating revenue above EUR 50 m.Definition Corporate SME: volume of loan above EUR 1.5 m. and operating revenue below EUR 50 m.

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Definition SME: volume of loan below EUR 1.5 m. and operating revenue below EUR 50 m.Definition Retail SME: volume of loan below EUR 1 m. and operating revenue below EUR 50 m.

Distribution ofnon-performing loansp g

Distribution of non-performing loans by business fields (EUR m.)1)

354 348300

350

400

450

294

150

200

250

300

8048 20

10

50

100

• The volume of the Associations‘s non-performing loans was EUR 1.1 bn. as of 30 September 2016.

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1) As of 30 September 2016

Development ofnon-performing loansp g

Development of Association’s non-performing loans (EUR bn.)

4,34,0 3,8 3,8 3,7 3,73,5

4,0

4,5

3,02,8 2,7

2,22,0

2,5

3,0

1,3 1,2 1,2 1,1 1,1

0,5

1,0

1,5

0,0

• Based on the Association’s loans and advances to customers of EUR 26.5 bn. the NPL ratio was 4.3% as of 30 S t b 2016 ti d f i t l 0 6 t i tSeptember 2016, representing a year-on-year decrease of approximately 0.6 percentage points.

• The decrease in non-performing loans in the third quarter of 2015 is mainly due to the fact that the former central organization VBAG was split and the wind-down unit immigon portfolioabbau ag subsequently left the Association of Volksbanks.

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Contents

Overview and governance

Loans and advances to customers and NPL

Liquidity and funding

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Volksbanks’ deposits

Development of Volksbanks’ deposits between 2003 and HY1 2016 (EUR bn.)1)

25

30

20.9

23.922.2 22.7 22.5 22.6 23.0

21.820 2 20 1

10

15

20

13.6 14.615.7

18.020.2 20.1

0

5

10

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 HY1 2016

Demand deposits Time deposits Savings deposits Other

• Th A i ti f V lk b k ’ d it t d t EUR 20 b f 30 J 2016

2)

• The Association of Volksbanks’ deposits stood at EUR 20 bn. as of 30 June 2016.

• In the previous year the fact that Volksbank Osttirol-Westkärnten, Volksbank Gmünd and Volksbank Almtal left the Association as well as the spin-off of immigon portfolioabbau ag resulted in a decrease in deposits.

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1) Source: Oesterreichische Nationalbank2) Other: foreign customers’ deposits

Level of liquidity is comfortable

Expected development of the liquidity pool (EUR bn.)

3,5

4,0

4,5 4.13.9

4.1 4.1 4.3 4.23.9 3.8

4.3

3.8

1,5

2,0

2,5

3,0

0,0

0,5

1,0

,

12/2016 01/2017 02/2017 03/2017 04/2017 05/2017 06/2017 07/2017 08/2017 09/201712/2016 01/2017 02/2017 03/2017 04/2017 05/2017 06/2017 07/2017 08/2017 09/2017

Bonds ECB credit claims Central bank deposits Cash, foreign exchange, gold Covered bond reserve

• The liquidity cushion held by the central organization Volksbank Wien for the Association of Volksbanks is• The liquidity cushion held by the central organization Volksbank Wien for the Association of Volksbanks is comfortable and currently reaches approximately EUR 4.1 bn.

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Maturity profile as of 30 September 2016p

Maturity profile of Association‘s issues (EUR m.)1)

1.000

1.200 1,167

400

600

800

0

200

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

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236198126

56 81166 123

240

40

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 onwards

Senior Bonds Covered bonds Mortgage bonds Subordinated bonds2)

Th A i ti f V lk b k h d b d b k d b t f th i l V lk b k• The Association of Volksbanks has a covered bond program backed by mortgages of the regional Volksbanks at its disposal, long-term liquidity can be generated through the issuance of covered bonds.

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1) Excluding nostro accounts2) Upper and lower tier 2 capital

Contact details

Karl Kinsky Tel: +43 (0)1 40137 – 3338Head of Investor Relations Mail: investorrelations@volksbankwien.at

Manuela Elsensohn-Pauser Tel: +43 (0)1 40137 – 3187Investor Relations Mail: investorrelations@volksbankwien.at

Homepage: www.volksbankwien.at/investoren

Address: VOLKSBANK WIEN AG, Schottengasse 10, 1010 Wien

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Disclaimer

This presentation is made for information purposes only, it is non-binding and shall not be treated as giving any form of investment advice.

Please note that there may be forward looking statements in this presentation. Such statements are based on current expectations and aretherefore subject to a number of known and unknown risks and uncertainties. The actual results and performances of VOLKSBANK WIEN AGor the Association of Volksbanks and any of their affiliates may differ materially from any such expected future result or performance asexpressed in or implied by the said forward looking statements. Reasons for such forward looking statements to eventually differ materiallyfrom actual results include, among others, various regulatory and economic factors beyond VOLKSBANK WIEN AG’s or any of their affiliatesfrom actual results include, among others, various regulatory and economic factors beyond VOLKSBANK WIEN AG s or any of their affiliatescontrol. VOLKSBANK WIEN AG assumes no obligation whatsoever to update or correct any information made in this presentation.

This presentation has been made with due diligence. Neither VOLKSBANK WIEN AG nor its directors, officers, employees, affiliates, advisers,representatives or any other person assumes any liability whatsoever as to the currentness, accuracy or completeness of the information oropinions contained in this presentation or for any loss howsoever arising from any use of or reliance on this presentation or its contents orotherwise arising in connection therewith Errors and omissions exceptedotherwise arising in connection therewith. Errors and omissions excepted.

The redistribution of this presentation and the information contained herein (in whole or in part) is strictly prohibited. The presentation must notbe copied, reproduced, distributed or passed (in whole or in part) to any other person without prior written consent of VOLKSBANK WIEN AG.All rights reserved.

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