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Management report
Macroeconomic conditions in 2015
Europe is recovering slowly
The European economic climate improved slightly in 2015 with a
moderate growth rate of 1.5 per cent. Private consumption was the
main source of economic stimulation. The significant improvement
in sentiment among consumers and businesses was reflected in a
number of surveys: the trend indicator reached its highest level for
many years.
Inflation keeps interest rates down
The inflation rate was a long way from such heights. It remained
stuck at the 0 per cent mark for most of the year. This resulted from
the downward trend in energy prices. The low inflation rate meant
that there was no prospect of interest rate increases in Europe.
Quite the reverse: interest rates were reduced further and will re-
main at low levels in the near future. Inflation, though, was not the
only factor that presented Europe with challenges. While the tough
negotiations between Greece and its creditors shaped the first half
of the year, the second half in Europe was dominated by the influx
of refugees and the terrorist atrocities in Paris.
The USA set the standard
In the USA, the economy finally overcame the crisis. Real gross
domestic product increased by 2.5 per cent compared to 2014.
The labour market, too, developed positively in 2015. A total of 2.5
million new jobs were created and the unemployment rate fell from
5.6 per cent to 5.0 per cent. In addition, the Fed, the central bank
of the USA, increased the base rate for the first time since June
2006. As the financial markets were prepared in the appropriate
manner for this step, the reaction to it was unspectacular.
All in all, a good year for shareholders
The stock market year 2015 was characterised by eruptions that
were turbulent at times. Good and bad news alternated at short in-
tervals. As a result, many established share indices, such as the
German DAX and the Japanese Nikkei 225, were around 20 per
cent higher than at the start of the year for a while. In August, a
succession of poor economic figures from China triggered glob-
al worries about growth. These brought the established stock
markets’ indices temporarily to their knees in a manner similar to
those of the newly industrialised countries. As early as autumn,
though, the most important global share indices recovered fair-
ly well from this setback and even the VW emissions scandal and
signs of an interest rate reversal in the USA dampened the mood
only temporarily. In addition to this, the corporate profits situation
was pleasing until recently and the (previously mostly reduced)
analysts’ expectations were exceeded in most cases. However,
the companies’ share prices have increased more strongly than
their profits in recent years. This led to increasing assessment ra-
tios. In spite of this, shares – especially in the eurozone – have
seemed, at the end of 2015 as well, to be more favourably priced
than other classes of investment (especially bonds). Shares in the
developed markets closed last year in considerably better shape
than those in the newly industrialised countries.
Bonds up and down as well
The European Central Bank (ECB) influenced the capital markets
decisively with its monetary measures in 2015. From March 2015
onwards, it bought a bond volume amounting to 60 billion euros
per month. In December the ECB again became active: it reduced
the deposit rate of interest for banks to –0.30 per cent and expand-
ed and/or prolonged its bond purchasing programme.
Two-year German government bonds showed a negative return
over the year as a whole and fell to just under –0.45 per cent.
The return on ten-year German government bonds showed a re-
markable trend. From the beginning of the year to mid-April, it de-
clined dramatically from 0.60 per cent to 0.05 per cent. Within two
months, however, it more than recovered from its downward trend
and increased the market interest rate to up to 1.05 per cent by
mid-June. In the second half of the year, the rate of return fell to be-
low 0.50 per cent again from time to time before closing the year at
0.63 per cent. The risk premiums of Spain and Italy, the most im-
portant peripheral states, continued to increase in the first half of
the year before easing substantially in the second half.
The refinancing challenge
The mood of foreign investors vis-à-vis Austrian issuers from the
banking segment has deteriorated due to the Heta moratorium.
Raiffeisen-Landesbank Tirol AG refinances itself by way of a diver-
sified funding mix that includes retail deposits and deposits from
Tyrolean Raiffeisen banks. Liabilities to customers and securitised
liabilities increased further in the year under review. In order to im-
prove its liquidity, the bank collaborated with the Tyrolean Raiffei-
sen banks in the expansion of the hypothecary coverage fund for
the issuance of solid bank bonds.
Generally, even Raiffeisen-Landesbank Tirol AG was unable to es-
cape from the overall pressure on margins in the Austrian market.
The Austrian economy:
Less growth, higher inflation
The Austrian economic trend in 2015 – as in 2014 – remained be-
hind that of the eurozone:
• The country’s gross domestic product increased by 0.9 per cent;