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Management report
Safeguarding deposits
Solidarity association of
Raiffeisen Banking Group Tyrol
Together with Raiffeisen-Landesbank Tirol AG, the Raiffeisen banks
of Raiffeisen Banking Group Tyrol have set up a solidarity associa-
tion that takes suitable action to ensure that association members
who get into economic difficulties receive the help they need.
Raiffeisen deposit guarantee association
This association of Raiffeisen banks, Raiffeisen regional banks,
Raiffeisen Zentralbank Österreich AG and Raiffeisen Bank Interna-
tional AG reciprocally guarantees all customer deposits and also
the securities issued by members, irrespective of the amounts in-
volved. The deposit guarantee association has a two-tier structure,
with the first tier being at the state level and the second at the fed-
eral level. The deposit guarantee association therefore offers cus-
tomers guarantees that go well beyond those required by law.
Deposit protection arrangements
Directive 2014/49/EU on deposit guarantee systems in Austria was
implemented by way of the Deposit Guarantee and Investor Com-
pensation Act (ESAEG). The Act stipulates that every guarantee
scheme must set up a deposit guarantee fund. This must be en-
dowed by means of annual prescribed contributions levied from
the member banks in the protection scheme up to the legally pre-
scribed amount of at least 0.8% of the member banks’ aggregate
protected deposits. The protection scheme function at the Raiffei-
sen Banking Group Austria is performed by Österreichische Raiffei-
sen-Einlagensicherung eGen (ÖRE).
If statutory deposit protection is to be financed by setting up an
ex-ante fund as defined by section 13 of the ESAEG, annual contri-
butions must be made in accordance with section 21 of the ESAEG.
The contribution sum, in accordance with section 23 of the ESAEG,
is based on the amount of protected deposits and the nature and
extent of the risks to which the respective institution is exposed.
In addition to this, the protection scheme may levy special contri-
butions up to a maximum amount of 0.5% of the member banks’
protected deposits per calendar year. In exceptional cases, this
limit can be exceeded if the FMA grants its permission. The
amount of the special contribution is determined, in accordance
with section 22 of the ESAEG, as the ratio of Raiffeisen-Landes-
bank Tirol AG’s most recently due annual contribution to the ag-
gregate amount of the protection scheme members’ most recent-
ly due annual contributions. No special contributions were levied in
the financial year 2015.
In the event of a compensation payout for protected investment
service as defined by section 49 of the ESAEG (investor compen-
sation), the individual bank’s contribution per financial year is max-
imum 1.5% of the assessment basis in accordance with article 92,
paragraph 3, letter a of the CRR, plus 12.5 times the capital re-
system or process failures, mistakes by employees and external
events are analysed and evaluated with a view to devising suita-
ble countermeasures. The processes and systems also include all
preparations made to combat money laundering and the financing
of terrorism.
The regulatory capital resources needed to combat operational
risk are determined using a base indicator approach. The risks are
depicted and managed using modern IT systems. This process is
backed up by scheduled internal audits and periodic reporting to
ensure that operational risk is tackled vigorously.
Risk-bearing capacity
In the process of steering the bank’s overall risk, our capacity to
cover risk is tallied against all significant risks identified using ap-
propriate methods and systems suitable for this purpose.
The planned annual risk exposure represents the limitation of the ag-
gregated overall bank risk, taking into account not just the risks ac-
tually identified and quantified but also other non-quantifiable risks
by putting in place a risk buffer. All risk-relevant information is fed into
monthly risk-bearing capacity reports, which are discussed in depth
by the risk committee. Various different scenarios are used to deter-
mine overall bank risk in order to ensure that sufficient capital would
be available for a potential problem case (95.0% confidence level), but
also for an improbable extreme case (99.9% confidence level).
The risk of excessive debt, too, is regularly measured and reported
using the leverage ratio.
At Raiffeisen-Landesbank Tirol AG, greater attention is given to the
credit, market and liquidity risk management processes due to the
fact that the focus of the bank’s activities is on private and com-
mercial customers and also treasury business. Credit risk, includ-
ing the macroeconomic risk, is calculated on the basis of default
probabilities and loss ratios, while trading book and banking book
market risk and liquidity risk are calculated using key sensitivity fig-
ures. Aside from market-dependent risks, the overall bank-man-
aging process also involves the calculation of investment risk and
operational risk in order to both represent all risks and take into ac-
count the ever-growing supervisory requirements.
The risk capacity analysis thus forms the starting point for keep-
ing risky activities down to a reasonable level in order to ensure the
trouble-free continuing existence of Raiffeisen-Landesbank Tirol
AG while fully exploiting its revenue potential.
The consequences of events that cannot be accounted for ade-
quately or at all using conventional risk assessment methods are
identified by conducting scheduled stress tests. This involves de-
fining stress scenarios for each of the principal risk categories and
analysing the impact of these exceptional situations on the income
statement, our capital adequacy and risk-bearing ability.