BAWAG Group AG (BG) Earnings Call Transcript & Summary

Ladies and gentlemen, as Chairman of the Supervisory Board, I take the chair pursuant to Section 116 Para 1 of the Stock Corporation Act, and I open today's AGM of the BAWAG Group AG. The Board has decided to protect the shareholders and other participants and to use the statutory regulation of hosting this meeting virtually. Therefore, today's AGM will be held virtually pursuant to the provisions of the COVID-19 law and the COVID-19 regulation in consideration of the interest of participants and the company. This AGM will be fully broadcast on Internet, and I welcome the shareholders, who are listening in on Internet. As we are hosting this AGM as a virtual meeting, some changes have become necessary in how we conduct this meeting compared to a meeting with the presence of shareholders. Other changes affect the exercise of shareholder rights, as they were presented in the information for participation at this virtual AGM on our website. Then after, Dr. Brix will then explain those modalities in detail. Although most of you are familiar with proceedings at this AGM, we still have to inform you comprehensively about the legal requirements, as we have new participants today as well. This ensures that all shareholders are comprehensively and fully informed participating in this meeting. First of all, you will be presented with the reports and the proposed resolutions on all agenda items on block. After that, the special proxy representatives will be given the floor to read out any proposed resolutions submitted by shareholders. After that, we'll have a general debate, which means that we will read out questions from shareholders and answer them after all questions on all agenda items have been answered, we will then proceed to a vote in the order set out in the agenda. I note that, first, the convocation for today's AGM was published in accordance with the provisions of Section 106 Stock Corporation Act in due course and time in Journal on the 30th of July 2021. And that pursuant to Section 107 Para 3 of the Stock Corporation Act. It was electronically disseminated European-wide through Pressetext on the very same day within the meaning of Section 18 Para 2 of the Stock Exchange Act. The convocation was also transmitted in machine readable format via the intermediary chain directly to the shareholders. I note that we have not received any requests for amending the agenda or for any further proposed resolutions by shareholders. This is why there was no need to publish any such requested amendments on the website of the company. This is why at today's AGM, we can only deal with those agenda items that were published in the convocation of July 30 2021, and we will be voting exclusively on the candidates for the Supervisory Board, agenda item 8, which have been disclosed on August 6, 2021, on the website of the company. Documents to be disclosed pursuant to Section 18 Para 3 and 4 of the Stock Corporation Act were made accessible on the 30th of July 2021 and on the 6th of August 2021 on the website of the company. Could I kindly ask the notary Dr. Brix to notarize today's resolutions to monitor the voting process and to take the minutes in according with Section 120 Stock Corporation Act. Could I also ask the notary, Dr. Brix, to explain to us the modalities for exercising shareholder rights at today's virtual AGM as published on the website of the company and how we're going to hold today's AGM? You have the floor, sir.

Thank you for giving me the floor, Chairman. Dear shareholders, in the convocation of the AGM of 30 July 2021, it was announced that today's AGM would be held as a virtual meeting without the physical presence of shareholders. In addition, on 30 July 2021, information on organizational and technical requirements for participation at the virtual AGM was published on the website of our company. Today's AGM is taking place in the physical presence of the Chairman of the Supervisory Board, Mr. Egbert Fleischer; the CFO, Mr. Enver Sirucic; the Chief Administrative Officer, Guido Jestädt; the 4 special proxy representatives, Mr. [indiscernible] as a subagent for Mr. Ewald Oberhammer. And I note that the proxy remains as it is, and the e-mail address that has been set up for Mr. Oberhammer will also be valid for Mr. [indiscernible]. Then there is Mrs. [indiscernible], attorney at law as a subagent of Mr. Lukas Röper, who's also prevented from coming today. And the same applies here, the proxies and powers of attorney are valid, and the e-mail address will be available, and you will use Mr. Röper's address for Mrs. Boom. And then we have Mr. Daniel Reiter and Mr. Gernot Wilfling, who are present here today as well as myself as a certifying notary. As representative of the auditor, KPMG Austria GmbH, we have Mr. Bernhard Mechtler, who is available for the Management Board and the Supervisory Board for telephone and by e-mail for any questions you may have. He will be listening in on the live stream. How are shareholder rights being exercised today? The right to vote, the right to file resolutions and motions and the right to file a protest is based on and carried out by special proxy representatives in pursuant with Section 3 Para 4 of the COVID-19 regulation. The right to obtain information can be also exercised at today's virtual AGM by shareholders themselves by electronic communication. They can send in questions by e-mail to the e-mail address, fragen.bawaggroup@hauptversammlung.at, if the shareholder has registered for today's AGM, pursuant to Point 4 and has given the power of attorney to a special proxy. Now some information on how today's virtual AGM will be broadcast and conducted in detail. Pursuant to Section 3, Para 1, 2 and 4 of the COVID-19 regulation, this AGM will be fully broadcast on Internet in real-time on Internet. BAWAG Group AG offers 2 alternative channels for the Internet broadcast with image and voice in German. If there's any disruptions in the broadcast, please switch to the other provider. Today's AGM will be held in German. There will be an English language interpretation of today's AGM from German into English. English listeners are kindly requested to listen in on the English language live stream on the website. The report by the Management Board will be presented by Mr. Sirucic. By the broadcast of today's virtual AGM on Internet, shareholders have a possibility to follow today's virtual AGM through this audiovisual one-way connection to listen to the presentation of the Management Board, the answer to questions asked by shareholders and also the voting process. Please note that this live broadcast as a virtual AGM does not allow for remote participation according to Section 102 Para 3, Sub Para 2 Stock Corporation Act 3 remote voting, Section 102 Para 3, sub Para 26 Stock Corporation Act and this Internet broadcast is not a 2-way connection. Shareholders, therefore, can only follow the AGM. In order to facilitate the preparation, organization and hosting of today's virtual, shareholders have been asked not to give any -- pass on your request to ask questions or read out contributions through their special proxies. Instead, the shareholders can themselves exercise their right to obtain information through electronic communication by sending questions by e-mail -- exclusively to the following e-mail address at fragen.bawaggroup@hauptversammlung.at. At today's AGM, those questions will be read out by the Chairman of the Supervisory Board and then answered either by the Chairman of the Supervisory Board or by members of the Management Board. How is this right to obtain information specifically exercised? I'd like to explicitly draw your attention to the fact that the right to obtain information at today's virtual AGM can be exercised by shareholders by sending an e-mail to fragen.bawaggroup@hauptversammlung.at. Please send your e-mail from the same e-mail address, which you indicated in the proxy form, so as to allow the company to identify and establish the identity of the shareholder. Please use the question form, which is available under the address, https://www.bawaggroup.com/hauptversammlung. If you do not use this form, you need to enter the data of the person, the name, company name, date of birth, registered number of the shareholders in your e-mails. In addition, you should also include the password, which is on the proxy form, so that in case of doubt, the company can verify identity of shareholders and conformity with the deposit certificate. Questions received by the company shall be read out and answered in accordance with Section 118 Stock Corporation Act by the Chairman. Shareholders therefore have a possibility to respond to any developments at the AGM themselves, for instance, by asking followup question or additional questions if we receive them in good time. The Chairman will determine the timing of the AGM similar to a meeting with the presence of shareholders. And he will, at a given moment in time, indicate a moment in time, up to which questions can be asked. I now move on to the special proxies. Shareholders have a possibility to give instructions to the special proxies, in particular, filing new applications, motions or requests, voting, changing their instructions and voting on one or several agenda items, but also filing a protest on one or several agenda items vis-a-vis their special proxy representative also during today's virtual AGM up to a given moment in time. For that purpose, please send an e-mail to the e-mail address of your special proxy representatives to whom you also gave the power of attorney to allow the company and the proxy to identify the shareholder. Here, you can see the e-mail addresses in the insert and they are as follows: oberhammer.bawaggroup@hauptversammlung.at., röper.bawaggroup@hauptversammlung.at, reiter.bawaggroup@hauptversammlung.at, wilfling.bawaggroup@hauptversammlung.at. As I mentioned in the beginning, these e-mail addresses will also be valid and apply to the attorneys, who are standing in for the proxies. In the simple e-mail, you need to give name, company name, date of birth, company registration number of the shareholder. And also, you need to sign this e-mail or give your name in accordance with the provisions of Section 13 Para 2 of the Stock Corporation Act, so that the special proxy can verify and establish your identity and conformity with the proxy given. Please note that today's virtual AGM, it is only possible to communicate with your special proxies through electronic means and that we cannot ensure that they can be reached via telephone. The moment up to which instructions can be given on filing resolutions, voting and raising the protest will also be determined by the Chairman during the course of today's meeting. I'd like to point out that if necessary, it might be necessary to briefly suspend today's meeting in order to process questions we might receive in the course of the AGM or instructions by shareholders to proxies in a safe manner. So much, ladies and gentlemen, in a summary, the way we're going to conduct today's virtual AGM as disclosed on the website of the company, especially in the document information on the organizational and technical requirements for participation at the virtual AGM. I now pass on the floor to the Chairman.

Thank you very much, Dr. Brix. As a Chairman, I instruct an order that today's AGM be held in a manner disclosed and announced on the website of the company and explained by the notary, Dr. Brix. The list of participants will be completed before the first vote. I will then sign it and inform you on the presence at today's AGM. This list of participants will be made available electronically for inspection to those present in the room, the special proxies. We will not be publishing the list of participants on the website of the company for reasons of data privacy. Let us now start and move to the agenda. Agenda item 1, the presentation of the approved annual financial statements and the management report, the consolidated corporate governance report, the consolidated financial statements, together with the consolidated management report, the proposal for the resolution on the appropriation of profit and the report of the Supervisory Board for the financial year 2020. We adopted financial statements and the management report, the consolidated corporate governance report, the consolidated financial statements and the consolidated management report, the proposal on the appropriation of profit and the report of the Supervisory Board for the business year 2020 have been made available pursuant to Section 108 Para 3 and 4 of Stock Corporation Act on the website of the company. The Supervisory Board of BAWAG Group AG delivered and performed all tasks that it has to comply with in accordance with the law, the articles and the bylaws. The Management Board informed the Supervisory Board in writing and orally in good time and comprehensively on all major issues in addition to periodic meetings. The Chairman of the Auditor Compliance Meeting and of the Risk and Credit Committee and myself had discussions with the members of the Management Board on current business affairs. As per 31 December 2020, the Supervisory Board consisted of 6 members. The Supervisory Board focused on the financial statements and the group financial statements for 2019 and discussed the election of the auditor for the year 2021. The major issues in which the Supervisory Board dealt was the strategy and the budget of the BAWAG Group, issues relating to ESG, the preparation of the transnational merger of Südwestbank with BAWAG P.S.K., the risk strategy and midterm planning as well as issues relating to the self evaluation of the Supervisory Board and succession planning. Moreover, the Supervisory Board was informed on a regular basis on measures and developments in the context of COVID-19 pandemic. It received updates regarding the multi-brand strategy in the segment retail and SME and it dealt with priorities within the technology group and the SREP process. The Auditor Compliance Committee discussed the quarterly reports from internal audit and of the compliance office as well as the annual audit plans for the years 2021 of Internal Audit and Compliance. Moreover, it monitored the annual audit 2020. In addition, it provided regular updates on legal matters compliance and AML issues, including cybersecurity, data security and data protection. Both the statutory auditor as the Head of Internal Audit attended all meetings. The Risk and Credit Committee discussed the group risk report, which included the risk-bearing capacity and reports on loan market and operational risk. In addition, the committee dealt with regulatory updates and updates on the credit risk in light of the COVID-19 pandemic. The Nomination and Remuneration Committee authorized the amendments of the remuneration policy and prepared the remuneration policy for the Supervisory Board and the Management Board, which were presented to AGM and ultimately adopted by the latter. In addition, it conducted the annual fit and proper valuation of the Management Board and the Supervisory Board. The committee also dealt with the organizational structure and issues of succession planning of BAWAG. All committees reported to the full Supervisory Board on their discussions and resolutions adopted. KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft based in Vienna audited the financial statements and the consolidated financial statements for 2020. There were no objections or complaints, and all statutory requirements were fully met and an unqualified audit opinion was granted. After in-depth debate, the Supervisory Board adopted the financial statements which, therefore, stands officially adopted pursuant to Section 96 Para 4 of the Stock Corporation Act. In addition, the Supervisory Board reviewed the special consolidated nonfinancial report, and it took note of the consolidated financial statements. Could I ask our CFO, Mr. Sirucic, for his report? You have the floor, sir.

Thank you very much, Mr. Chairman. The 2020 was a difficult year, and it came as a bad surprise for all of us. Numerous aspects of our lives were changed for ever. BAWAG Group itself was confronted with the crisis in a position of strength because we had used the recent years to transform our business model and to prepare for a cyclical downturn. Of course, none of us had been aware of the fact that this would happen within the framework of the pandemic. I would like to single out a few highlights from 2020. We reported a net profit of EUR 284 million, earnings per share of EUR 3.19, which, of course, was below the prior year's level, but the return on tangible common equity was 10.2%, which is quite remarkable after all. Our business model proved to be robust and sturdy, which is due not least to the efficient platform we are operating on. And this is also reflected in a cost-income ratio of just over 44%. As regards to capital, and I will come back to that later, just a few important points. Our CET1 ratio at year-end 2020 was 14% post-dividend accrual, including dividends, we are proposing for distribution today. For 2019 and 2020, dividends added up to EUR 460 million, part of that based on the recommendation of the ECB, that is EUR 40 million were distributed already in the first quarter of 2021. 14% CET1 ratio, this is well above our target ratio of 12.25% and well above our minimum requirements, which are 9.1% approximately. As regards to our strategy, I will show you a more detailed slide on that later on. Basically, we have remained faithful to our strategy for many years. And even in such a difficult environment, it enabled us to generate the results just presented. So we are on the right track, and we will stick to our strategy also in the future. Let me briefly elaborate on the share price development. Fortunately, the market sort of appreciates our performance in 2020. Nevertheless, there is a minus sign. The development for 2020 as a whole was minus 6%, but compared to the benchmark indexes, be it European banks or the ATX, we outperformed these indexes. 2021 is extremely satisfactory. We are more or less in line with the market, plus 33% as of yesterday. And we do hope this development will continue until the end of the year. A few more details about our results in 2020. As I said, 2020 was marked by a drastic downturn in economic output in the euro in the economic -- in the European Union. We compared to the financial crisis, the downturn was much more significant in the financial crisis. The downturn was only minus 4%. So we had taken -- we had to take measures to protect the health of our employees, which resulted in lockdowns, travel restrictions, et cetera, which in turn was reflected in a downturn in consumer behavior. Therefore, we were very prudent in risk provisioning. Let me give you a few figures. In 2020, EUR 225 million risk provisions were set up, which is about 3x as much as in a normal year. When we look at those EUR 225 million, approximately EUR 1 million so-called management overlays and ECL reserves, that is for losses not yet incurred. But these are provisions set up on the basis of the principle of prudence, as we had to expect a deterioration of the environment. In 2021, we decided not to release these provisions because, fortunately, the economic environment took a much more positive turn than expected and also more positive than our 2020 balance sheet. When you look at customer behavior, payment moratoria which at the beginning were almost 7% have become almost negligible meanwhile, and we're at 0.2% midyear 2021. So we have hardly any aftereffects -- negative aftereffects from 2021 on our books. Cost of risk. If we exclude them as a major driver for the result of 2021, pre-provisioning, the result was steady and robust back to the level of 2018 with risk costs of EUR 653 million. This was possible only because we decided years ago already to pursue our strategy to operate in stable market and to enhance our efficiency and to reduce our costs accordingly. As regards to our strategy, our strategy will remain unchanged. The 4 pillars shown here have been well known to you because they have been firmly rooted in the group since 2012. And of course, there will be certain adjustments made, but we will stick to them in the years to come. The first thing is growing in our core markets. We will stick to our strategy. We go west. This is our slogan rather than go East. Our focus is on the German-speaking region in Europe, plus Western Europe and the United States, stable, highly developed markets. This is our focus. Despite the pandemic, we have been rather successful in our expansion. We have continued to grow in Germany and The Netherlands. We have expanded our retail offer in these countries. Then we are focusing on customer centricity. In combination was efficiency enhancement measures, we have succeeded in looking after our customers well in a difficult environment. All our branches remained open throughout 2020 during the lockdowns. And we reacted in a fast and nonbureaucratic manner to a continuously changing environment. We created an electronic channel for payment transfer and also for applications for moratoria. Being flexible is an essential element in a difficult environment if you want to be successful. You have to drive efficiency. Our margins and the low interest landscape do constitute a challenge for the banking sector. And we are convinced that we can only counter these developments by doing our homework well and focusing on things which we have under control as the management of the group. As regards to the safe and secure risk profile, this, of course, is to do with our geographic orientation, but also, as I said, both our approach to risk provisioning. We haven't released our risk provisions, and we have a strong risk buffer in our capital. Another thing that we have become increasingly aware of in the course of 2020 is our role in society as a bank. We are still in a learning process, but we are fully aware of the importance of ESG of sustainability topics. This is getting more and more important in our business environment. And this is the reason why we are focusing much more strongly on this aspect in our strategy. We want to embed ESG in our strategy. On this page, you can see some of the initiatives. In fact, our teams are doing far more on ESG than is shown on this page. This refers partly to 2020, but also to highly topical issues from 2021. Starting on the left with the environment. There are various aspects. First, what can we, as a company, do better. Our focus is on energy efficiency and on reduction of our CO2 emissions. This -- as far as the use of green electricity is concerned, we are doing very well. 97% of our electricity used is green electricity. In the course of 2021, we are going to pursue hard targets for the reduction of CO2 emissions. What's new? Where can a bank play an important role? Of course, in lending. And we, as a bank, have a responsibility to assume, and we have to act responsibly. We have sharpened our lending criteria. We have introduced exclusion criteria to exclude certain sectors of industry. It's an important topic for us, but fortunately, not a major one. The share of so-called problematic sectors is low, less than 0.7% of our total assets. As regards to green finance, in recent months, we have set up a financing framework program, which meets the requirement of the EU taxonomy regulation. On the basis of this program, we have issued our first green bond that was on Tuesday this week. Moreover, as regards social issues, we have paid attention to those in human resources development and support providing for communities around us. And we introduced a number of parameters. In the first quarter, we set ourselves a target quarter for the percentage of women, 33% of the Supervisory Board and 33% in the senior leadership team, including the management team, the Management Board and the enlarged management team. So our target is 33% by 2027. Under the heading of Governance, we already -- we're doing quite a lot in recent years. And one highlight, which will come up again later is the creation of an ESG committee at Supervisory Board level by the end of the year. This is going to be an important milestone in this field. As regards to our team, I'd like to use the opportunity to welcome our new member, Guido Jestädt, and I would ask him to briefly introduce himself.

Thank you very much. Ladies and gentlemen, a cordial welcome also from my part to this year's AGM. I'm happy to use the occasion to briefly introduce myself. I've been living in Vienna for more than 10 years, but you will notice immediately that I come from Germany. I grew up there. I studied in Germany, and I also studied in England. I studied law. After my studies, I practiced as a layer in an international law firm in Frankfurt in the field of international finance. And I also acted in an advisory capacity. In 2012, I got the chance to work for BAWAG in Vienna. During my first years, I was responsible for providing legal advice for international finance business. And toward the end of 2016, I assumed the leadership of the legal department and the department got additional tasks, HR law, for example, and our General Secretariat. The underlying idea was to have all legal issues under one umbrella, not only was a view to our business in Austria but across the group. In my new function as so-called Chief Administrative Officer, I've been working on compliance, participations, taxes and regulatory issues. The objective of grouping all these issues together is to reposition ourselves. As we are expanding into new jurisdictions, we have to investigate the framework from all angles, and it helps a great deal when the teams are cooperating closely. So much about my career so far. On this slide, you can see that there are also new Supervisory Board members, Gerrit Schneider and Tamara Kapeller are being proposed for election to the Supervisory Board, and the shareholder -- the capital representatives are to be reelected. So after today's AGM, the Supervisory Board will have 6 capital representatives and 3 labor representatives. And my colleague, Mr. Sirucic already pointed out that we are paying increasing attention to the issue of sustainability and that we are planning to set up a new Supervisory Board committee to deal primarily with issues of ESG. We will be hearing more about that in the course of today's AGM. So thank you very much, and I hand back to my colleague, Mr. Sirucic.

Thank you very much. So let's move on to the second topic, which is capital distribution. I will first talk about capital generation in 2020 and then I will present the proposals regarding capital distribution for 2019 and 2020. So 2019, we had a CET ratio of 14.4%, pre-dividend, approximately 1.8 percentage points, was capital generated mainly through earnings. And this adds to our capital. So pre-dividend distribution, we were at 16.3%. When you deduct the EUR 460 million in dividends, which corresponds to approximately 2.3 percentage points, you end up -- after deduction of dividend distribution, you end up with 14% post dividend. Those 14% are well above our target of 12.25%, which is, again, more than 3 percentage points above our minimum requirements, which we have to meet as a bank. As regards to the city of Linz case, we decided on the capital side to provision for that. This is already included in the figures, and the net effect is approximately 16 basis points of our core capital. As regards to capital distribution, this slide gives you a summary in 2019. We earmarked EUR 230 million for distribution. Given the recommendations of the regulator and the ECB, we haven't yet distributed that. So the money has been parked for 2020, another EUR 142 million to be distributed from our net profit of EUR 284 million. We then decided to pay up -- to propose a special dividend of EUR 88 million. Why exactly EUR 88 million? We wanted to balance the amount as compared to EUR 230 million, and we wanted to distribute -- to propose this special dividend as a sign of appreciation our shareholders' patience during the pandemic. So the total is EUR 460 million, twice EUR 230 million or EUR 5.17 dividend per share. EUR 40 million of the total were already paid out. So what remains is EUR 420 million for distribution, and we will submit a proposal later on. When -- we're quite advanced in the year. We are already in the third quarter of 2021. This is a brief overview of what happened since the end of the year and what the situation is like after the second quarter of 2021. EUR 420 million dividend have already been deducted. Another almost EUR 100 million have already been earmarked for distribution for 2021. And our core -- our CET1 ratio is 14.4%. That is 4 basis points higher than at the end of 2020. So post dividend for 2019 and 2020. And after the earmarked distribution for 2021, we still have excess capital of approximately EUR 440 million. And all that before the release of risk provisions that were set up within the framework of COVID in 2020. As regards to the financial developments in 2020 and 2021, in fact, we are already in the second half of the year. Here are a few relevant metrics, which I'd like to share with you. 2020 on the left-hand side of this slide, the most important components of the P&L; on the right-hand side, the most important components of the balance sheet. On the left, EUR 370 million profit before tax, EUR 284 million after tax. So it's a significant reduction compared to 2019. But core revenues, that is our operational performance without any disturbing factors, slightly positive, plus 1%. But as you can see, EUR 225 million risk provisions significantly higher than in a normal year, and that led to a relatively low result compared to normal years. On the right-hand side, a very simple message. Everything is growing. There are plus signs everywhere. So growth on the customer loan side and growth on the customer deposit side. The savings ratios have gone up, not just in Austria but worldwide. EUR 32 billion customer loans and EUR 32 billion customer deposits, which gives you a perfect match. In addition to growth from customer business, we've also participated in the long-term refinancing program of the ECB. Therefore, our total assets grew slightly more than a customer business. Earmarked dividends are already included. Our CET -- our tangible common equity has increased by 5%, and that testifies to the resilience of our company and has further strengthened our resilience. On the next page, you can see a few more details. I think I mentioned most of that already being the cost-income ratio or the RoTCE. The financial development in 2020 despite the very difficult environment was a strong development, which allowed us not only to stick to our dividend policy and to even increase it to the prior year's level, we were able to raise additional capital in the market. We issued EUR 175 million in additional -- additional Tier 1 capital and EUR 200 million Tier 2 capital. Now let's move on to the present developments in 2021. 2021 is a kind of bridge year, very positive so far. As regards to the figures, we are almost back to the pre-pandemic level. This is reflected in our ROTC, that is the return on equity. And we are moving back to slightly above 16%. We have, therefore, increased our targets for 2021. And the target we are approaching is 15.1% return on equity. That is the level which we had achieved before the pandemic. So overall, the situation is positive. Core revenues are increasing. We have costs well under control. Costs of risk have gone up after the increased risk provisions of 2020. But again, we didn't use up any of our reserves, and we didn't release provisions set up in 2020. We are confident that 2021 will look good and ROTC of 15% is a reasonable expectation, and our cost-income ratio will be around 40% to 44%. I almost forgot to mention M&A. Two important points. The HelloBank, the acquisition of the HelloBank has already been announced. We think that this is going to be a most valuable expansion of our business for the future, and we are looking forward to working together with the team of the HelloBank for the benefit of our customers. Second point, the acquisition of the DEPFA BANK. This is not a classic expansion of our business. This is rather a classic financial investment, which is about to be closed. We want to make use of our efficient platform in order to wind down the business as efficiently as possible. On this page, you can see numerous parameters. I won't elaborate on all of them. But when you look at core revenues, we are growing. Our costs are within a reasonable range. Our risk costs have gone down. The only thing that has gone up is regulatory charges that's to do with the deposit insurance regime in Austria. We are certainly aware of the cases on hand are pending. Our customer business is growing. So growth is continuing and growth is continuing throughout 2021. Finally, and in conclusion, a quick outlook to 2021, as a whole and our target. So this is a kind of commercial, for ourselves, the outlook for 2021 is almost unchanged. Core revenues, approximately plus 2%. Other income, we are budgeting 0. 100% of our revenues come from our bread and butter business. Operating expenses estimated at EUR 485 million, approximately 3% below 2020. Regulatory charges even with the most recent case of [indiscernible] we will come to approximately EUR 60 million and cost of risk will be significantly below the EUR 225 million of 2020. We expect to be below EUR 100 million in risk costs. So we are aiming at an RoTCE of 15% and a cost-income ratio of 40%. We are planning our first Investor Day. We had intended to have one last year, but it had to be postponed. So our Capital Markets Day will be on the 20th of September, and we will give a full outlook for the 4-year plan through 2025, and that will allow us to tell you in more specific terms, what we're aiming at in the coming 4 years. Ladies and gentlemen, that ends my presentation, and I hand back to our notary, Mr. Brix.

Thank you, Mr. Sirucic, you are a bit too fast. There are still some other sections we have to deal with. I'd like to thank the Management Board once again for the report, and I take this opportunity to express my sincere thanks and appreciation to the members of the Management Board and all staff members of the company on my own behalf and on behalf of the Supervisory Board for their commitment and dedication in the year of report. It has been a challenging year for the BAWAG Group staff members and the management Board. I'd also like to thank the members of the Works' Council for good cooperation in the Supervisory Board and also for their constructive role in the company. We now move on to the presentation of the proposed resolutions on all agenda items by the notary, Dr. Brix.

First of all, agenda item 2, resolution on the appropriation of profit. The Management Board and the Supervisory Board are proposing that the AGM adopt the following resolution. The available profit for distribution recognized in the annual financial statements of BAWAG Group AG as of December 31, 2020, in the amount of EUR 3,298,832,955.87 shall be appropriate in accordance with the Management Board proposal as follows: each share, which is entitled to a dividend on the record date, 7 October 2021, shall receive a dividend in the amount of EUR 4.7218, adding up to a maximum of EUR 419,562,000. The remainder shall be carried forward to new account. The dividend payout date is the 8th of October 2021. The ex dividend day will be on the 6th of October 2021. This resolution is subject to the conditions precedent that, a, until 30 December 2021, end of day, the European Central Bank does not publish a recommendation pursuant to which the recommendation of the European Central Bank of 15 December 2020 on dividend distributions during the COVID-19 pandemic and repealing recommendation ECB/2020/35, ECB/2020/62, 2020/C 437/01 is extended beyond 30 September 2021; and b, does not publish any other recommendation or adopt any decision, which will preclude BAWAG Group AG to distribute dividends in line with this resolution. And at the time of the fulfillment of the condition precedent under Item 1, no legal proposition applies to pay out the dividend in line with this resolution. If any of these conditions precedents are not fulfilled, the entire profit available for distribution recognized in the annual financial statements of BAWAG Group AG of 31 December 2021 shall be carried forward to new account. I now give back the floor to the FCO, Mr. Sirucic, for further explanations on this agenda item.

Thank you very much, notary Dr. Brix. On 27 July 2020, the European Central Bank recommended to credit institutions according to which credit institutions until 1 January 2021 shall not pay out any dividends and no irrevocable commitment to pay out dividends should be undertaken for the financial years 2019 and 2020. On 15 December 2020, the ECB published another recommendation stating that major credit institutions should be reticence -- exercise reticence when and extreme prudence when deciding on or paying out dividends or performing share buybacks aimed at remunerating shareholders. It would not be prudent to make distributions of more than 50% of the accumulated profit for the financial years 2019 and 2020 or more than 20 basis points in terms of the common equity Tier 1 ratio, whichever is lower. We have communicated repeatedly that for 2021, the Management Board would be paying out dividends in the amount of EUR 460 million. This is in accordance to the earmarked profit in the amount of EUR 372 million for the financial years 2019 and 2020. Additionally, a special dividend of EUR 88 million for 2020 is suggested, so as to keep the absolute dividend amount of dividends at the same level, EUR 230 million. Accordingly, on the 3rd of March 2021, we had an extraordinary general meeting and together with the Supervisory Board suggests that distributing a dividend in the amount of EUR 0.4551 per share, which per each dividend-entitled share, adding up to dividends in the amount of EUR 4,438,000, which is the maximum amount, which BAWAG Group AG was allowed to distribute. Now following the announcement of the ECB not to extend beyond 30 December 2021 its recommendation that bank limit dividends, we are proposing together with the Supervisory Board That the distribution of the remainder being made of EUR 420 million as a dividend. This resolution is subject to the conditions precedence, so that particularly account for the limits set forth by the ECB, which formally remain applicable until the end of 30 September 2021. Could I now ask the notary, Dr. Brix, to carry on with reading out the remaining agenda items.

Agenda item 3, resolution on granting discharge and formally approving the actions of the members of the Management Board with regard to the financial year 2020. The Management Board and the Supervisory Board are proposing that the AGM adopt the following resolution. All members of the Management Board of BAWAG Group AG incumbent in the financial year 2020 are granted discharge for the activity in the financial year 2020. Agenda Item 4, resolution on granting discharge and formally approving of the actions of the members of the Supervisory Board with regard to the financial year '22. The Management Board and the Supervisory Board are proposing that the AGM adopt the following resolution. All members of the Supervisory Board of BAWAG Group AG incumbent in the financial year 2020 are granted discharge for their activity in the financial year 2020. Agenda Item 5, election of statutory auditor and the group auditor for the audit of the financial statements and the consolidated financial statements for the financial year 2022. The Supervisory Board is proposing that the AGM adopt the following resolution. KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft shall be appointed auditor of the annual financial statements of the Management Board as well as the consolidated financial statements and the consolidated management report for the financial year 2022. As further in note, the auditor for the current financial year 2021, which is also KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft has already been appointed at the AGM held on 30 October 2020. Agenda Item 6, approval of the remuneration report for 2020. Management Board and the Supervisory Board are proposing that the AGM about the following resolution. The remuneration report for the financial year 2020 concerning the Management Board and the Supervisory Board shall be approved explanatory note. The remuneration report for the financial year 2020 was drawn up in accordance with the relative provisions and resolved on by both Management Board and the Supervisory Board. Agenda Item 7, amendment of the of Association, Article 9. The Management Board and the Supervisory Board are proposing that the AGM adopt the following resolution. The Articles of Association for company's share be amended in Article 9.1 Para (1) and should read as follows: the Supervisory Board shall consist of at least 3 and a maximum of 6 members, used to be 4 elected by the General Meeting and/or delegated by shareholders according to Section 88 Stock Corporation Act owner representatives as well as the staff represented delegated by the Works' Council in accordance with the Works Constitution Act as amended. Shareholders Golden Tree Holdco Lux 2 S.à r.l. registered with the Luxembourg Trade & Companies, Registre de Commerce et des Sociétés, and the #B176469 shall have the right to delegate one of the members of the Supervisory Board. But as long as GoldenTree Holdco Lux 2 S.à r.l. holds a direct participation in the company of at least 1 share. The total number of members delegated pursuant to Section 88 Stock Corporation Act must not exceed 1/3 of the total number of members elected by the General Meeting and/or delegated by shareholders according to Section 88 Stock Corporation Act. And that would be a quote of the new wording of Article 9.1 Para (1). Explanatory note, the Management or the Supervisory Board of the company, on recommendation of the nomination and remuneration report, is to be stepped up from 5 to 6 capital representatives. And for this, it is necessary to amend the Articles of Association. Agenda item 8, elections to the Supervisory Board. The Supervisory Board is proposing that the AGM adopt the following resolutions. One, the number of capital representatives on the Supervisory Board shall be increased from currently 4 to 6 persons; second, Mrs. Gerrit Schneider born on 24 August 1973 is appointed as a member of the Supervisory Board of BAWAG Group AG with effect from the registration of the amendment of the Articles of Association pursuant to agenda item 7 in the register until the end of the AGM, which results on the discharge for the financial year 2024; three, Ms. Tamara Kapeller, born March 29, 1978, shall be appointed as a member of the Supervisory Board of BAWAG Group AG with effect from the registration of the Agenda Item 7 in the commercial register until the end of the AGM, which results on the discharge for the financial year 2024; four, Mr. Egbert Fleischer, born 27 March 1957, is appointed as a member of the Supervisor Board of BAWAG Group AG with effect as of the end of the Annual General Meeting until the end of the Annual General meeting, which results on the discharge for the financial year 2024; five, Mr. Kim Fennebresque, born 20 March 1950, is appointed as a member of the Supervisory Board of BAWAG Group AG with effect as of the end of AGM -- until the end of the AGM, which results in discharge for financial year 2024; and six, Mr. Adam Rosmarin, born 31 January 1963, is appointed as a member of the Supervisory Board of BAWAG Group AG with effect as of the end of this AGM until the end of the AGM, which results in the discharge for the financial year 2024. Explanatory note. The Nomination and Remuneration Committee of the Supervisory Board recommended to step up the Supervisory Board by 2 additional capital representatives, 2 of total of 6 capital representatives and to elect 2 additional female members. The resolution proposals were made in compliance with requirements of Section 87 Para 2 of the Stock Corporation Act and the Corporate Governance Code. Further, the currently elected members of the Supervisory Board shall be reelected for a 4-year period of profit until the end of the Annual General Meeting to be held in 2025 to ensure continuity of a successful team after the members of the Management Board having extended the contract through 2026 already last year. The Nomination and Remuneration Committee has evaluated professional and personal qualifications of the members as well as the balance composition of the Supervisory Board within the meaning of Section 87 para 2a of the Stock Corporation Act and has given due consideration to aspects of diversity of the Supervisory Board with regard to the representation of both genders, the age structure as well as the international professional background of the nominees. Currently, the Supervisory Board consists of 4 male capital representatives as well as 1 male and 1 female employee representatives. After stepping up the number of capital representatives to 6, as proposed on Agenda Item 7 of this AGM, Section 86 para 7 of the Stock Corporation Act will require at least 30% of the members of the Supervisory Board to be female. Further, the Nomination and Remuneration Committee has set a female target quota of 33% at Supervisory Board level to be reached by 2027. If the Annual General Meeting follows the proposal of the Supervisory Board and given that the works council has confirmed to delegate another female, Supervisory Board will then consist of 4 women and 5 men, resulting in a 44.4% quota in terms of female representation at the Supervisory Board. Both the legal requirements and the internal target would thus be over fulfilled. Each proposed candidate has submitted a declaration pursuant to Section 87 para 2 of the Stock Corporation Act, including their CVs, which is available on the company's website and they have declared, in particular that all circumstances in connection with Section 87 para 2 of the Stock Corporation Act have been disclosed, and that in the assessment by the proposed candidates, there are no circumstances that could give reason -- rise to a concern of bias. Second, the proposed candidates have not been convicted of any criminal offense, in particular, not of any offense that would doubt their professional reliability, pursuant to Section 87 para 2a sentence 3 of the Stock Corporation Act. And three, that there are no impediments to the appointment within the meaning of Section 86 para 2 and 4 of the Stock Corporation Act. Given the digital format of today's AGM, the presentation of Mrs. Gerrit Schneider and Mrs. Tamara Kapeller will be made by Mr. Fleischer as Chairman of the Supervisory Board, and I'd ask him to do that.

Thank you very much. Mrs. Gerrit Schneider has been working for BAWAG now since 2019, first as CFO and then since 2020, also as co-CEO. She launched her career with General Electric, where she worked for over 2 decades. She had management function and her focus was finance, audit and Investor Relations. Dr. Tamara Kapeller studied law and after completing her studies, she spent many years in reputed law firms. She started to work for BAWAG in 2008 as Senior Legal Counsel. Over the past 13 years, she has been responsible for different areas within the company, both candidates are Austrian citizens. We, as Supervisory Board, are convinced that Ms. Schneider and Ms. Kapeller, provided they are appointed by a majority at today's AGM, will be able to contribute their abilities and capacities and various different perspective and experiences to the work of the Supervisory Board. The remaining candidates for elections, Mr. Fennebresque, Mr. Rosmarin and myself, are familiar to shareholders from earlier presentations. I think we can dispense with any such presentation. Could I also draw your attention, refer you to the CVs, which are accessible on the website of our company. Could I now ask the notary, Dr. Brix, to continue with agenda item 9.

Thank you very much. I move on to the proposed resolution on agenda item 9, which is the last agenda item to authorize the Management Board: a, to acquire the company's own share pursuant to Section 65, para 1, #8 and para 1a and 1b Stock Corporation Act via the stock exchange, a public offer or over-the-counter, also with the exclusion of pro rata shareholder rights of repurchase. That's a reverse exclusion of subscription rights. B, to decide on any other mode of transferring the company's own shares pursuant to Section 65, para 1b Stock Corporation Act other than via the stock exchange or a public office (sic) [ offer ] while applying mutatis mutandis, the rules on the exclusion of shareholder subscription rights. C, to reduce the share capital by canceling these treasury shares with no further resolution of the general meeting. And d, all of these points, a through c was revoking corresponding authorization in accordance with the resolution on agenda item 9 adopted by the general meeting on 30 October 2020. And that is the agenda item where the following proposed resolution is submitted to the AGM for adoption; a, the Management Board shall be authorized for a period of 30 months from the date of today's resolution in accordance with Section 65, para 1, #8 and para 1a and 1b Stock Corporation Act to acquire own shares of the company. The consideration to be paid per share when acquiring shares must not be lower than EUR 1, which is the calculated proportion of the share capital and must not be more than 50% above the volume weighted average price of the last 20 trading days preceding the respective purchase. In the event of a public offer, the reference date for the end of this period shall be the day on which the intention to launch a public offer has been announced. Section 5, para 2 and 3 Austrian Takeover Act. The Management Board shall be authorized to determine the repurchase conditions. The Management Board may exercise this authorization within the statutory limits on the maximum number of own shares either once or on several occasions, provided that the percentage amount of the share capital of the company relating to shares held by the company on account of this authorization or otherwise does not exceed 10% of the share capital at any time. Repeated exercise of this authorization shall be permissible. Also, it may be exercised for one or several purposes by the company by a subsidiary, Section 189a, #7 of the company's code, or by third parties acting on behalf of the company. The acquisition may take place at the discretion of the Management Board via the stock exchange or a public offer or with the consent of the Supervisory Board in any other legally permissible, appropriate manner, in particular, also under exclusion of the shareholders' pro rata rights of repurchase, the reverse exclusion of subscription rights and also by using equity capital derivatives. Trades in own shares shall be excluded as a purpose for purchase. B, the management Board shall be further authorized to transfer the acquired shares without additional resolution by the AGM via the stock exchange or a public offer and to determine the terms of transfer. Moreover, the Management Board shall be authorized for a period of 5 years from the date of today's resolution in accordance with Section 65 para 1b Stock Corporation Act to adopt a resolution subject to the consent of the Supervisory Board in accordance with Section 65 para 1b Stock Corporation Act to adopt the resolution on the transfer of treasury shares using a different legally permitted method of transferring than via the stock exchange or a public offer and on exclusion of preemption rights of shareholders and to determine the terms and conditions of the transfer of these shares. The authorization includes, in particular, but is not limited to the transfer of own shares by using a different legally permitted method of transferring via the stock exchange or a public offer for the following purposes: One, to the extent necessary to service debt instruments, including participation rights, with conversion option rights or a conversion obligation issued by the company or its subsidiaries, Section 189a, #7 Companies Code (sic) [ Commercial Code ] or yet to be issued. Two, to transfer shares to employees, senior executives as well as members of the Management Board of the company or its subsidiaries, Section 189a, #7 Companies Code (sic) [ Commercial Code ] for remuneration purposes. Three, in order to be able to transfer the shares in exchange for noncash contributions provided this is done for the purpose of, also indirectly, acquiring shares, parts of companies or participations in companies or other assets related to the acquisition project. Four, to carry out a so-called scrip dividend in the course of which the shareholder of the company are offered to contribute their dividend claim in whole or in part as a contribution in kind against the transfer of own shares. And five, in order to be able to transfer the shares in any other way than via the stock exchange or a public offer to all shareholders provided the exercise of the present authorization is objectively justified on the exercise date in accordance with respective applicable legal requirements. C, in addition, the Management Board shall be authorized to cancel the own shares acquired in whole or in part without an additional resolution by the AGM with the consent of the Supervisory Board. The cancellation causes a capital reduction by the portion of the share capital that is attributable to the canceled shares. All authorizations, Sections a to c can be used once or on several occasions in whole or in part, individually or jointly. The authorizations also includes the use of treasury shares held by the company as well as shares in the company acquired by subsidiaries or third parties for the account of the company or a subsidiary pursuant to Section 66, Stock Corporation Act. In addition, the authorization set forth in Section b and c shall apply both to treasury shares already held by the company on the day of this resolution or to treasury shares to be acquired in future. D, the corresponding authorizations granted by the general meeting on 30 October 2020, agenda item 9, shall be revoked. So much for the proposed resolutions on agenda item 9. On explanatory note, reference made to the management report on the acquisition and the transfer of treasury shares of the company pursuant to Section 65 para 1b in conjunction with Section 170, para 2 in conjunction with Section 153, para 4, Stock Corporation Act. And I hand back the floor to our Chairman.

Thank you very much, Dr. Brix, for this presentation. This concludes the presentation of the reports and the proposed resolutions on all agenda items. I now give the floor to every one of the special proxies. Please inform us whether you've received any proposed resolutions on behalf and from the shareholders. If this is the case, please read them out aloud. If not, please confirm that you have not received any proposed resolutions. I give the floor to Mr. [ Spindler. ]

Ladies and gentlemen, so far, I have not received any proposed resolutions.

Mrs. [ Buhm? ]

Ladies and gentlemen, currently, I have not received any proposed resolutions.

Dr. Daniel Reiter?

The Chairman, thank you very much for giving me the floor. I myself have also not received any proposed resolutions.

Mr. Gernot Wilfling?

Thank you, Mr. Chairman. Again, I have not received any proposed resolutions.

Thank you very much. The notary will take this up for the record. Let us now move to the general debate, reading out and answering of questions from shareholders. The company before this AGM has received questions from shareholders, and questions have already been -- also been received during and in the course of this AGM by shareholders via e-mail. Could I invite all shareholders who want to ask questions during the AGM to do that now? And for that purpose, send the questions by e-mail to the address, fragen.bawaggroup@hauptversammlung.at as soon as possible. As Chairman of this AGM, I will then read out the questions from shareholders, and Mr. Sirucic and Mr. Jestadt, as members of the Management Board, and I myself will provide answers. I now move on to the first set of questions from Mr. [ Josef Baumüller. ]

Mr. [ Baumüller ] asked us to read out the questions as comprehensively as possible. But for reasons of time, we have taken the liberty to summarize the questions, including the introduction. Now here is the text. First of all, the financial -- [ Mr. Baumüller ] underlines the financial success of the business here and the commitment to the principle of sustainability. Mr. [ Baumüller ] also notes that the creation of an ESG committee is a welcome and important step. Mr. [ Baumüller ] then raises a number of critical points, which will be expressed in the questions. Mr. [ Baumüller ] expresses his disappointment that during the last extraordinary general meeting some questions were not answered. It was said that they were not on the agenda of the AGM. With a view to the proposed distribution of dividends, Mr. [ Baumüller ] notes that from a certain point of view, he appreciates the high dividend. Nevertheless, he will vote against the proposal by the management as he thinks that it's too high at this point in time. Finally, he thanks all staff members for their energy and commitment and wishes them good health, good luck and optimism. I now read out the questions. Question one, please indicate specifically where you stand in terms of your implementation projects regarding the taxonomy regulation of the EU? Which steps are you taking in order to prepare for the required reporting and management obligations? To facilitate the understanding of this topic, I would be grateful to you if you could briefly indicate the contents and the requirements of this regulation in general and specifically as regards BAWAG. The EU taxonomy states, which economic activities are green or sustainable and are making a substantial contribution to the achievement of environmental targets, and it specifies how green financing is to be measured in the future. Data processing is required in order to be able to assess the green component in financing, and this will also concern our processes and our reporting. In the course of 2021, we took first measures, and we are continuing along these lines to meet our reporting and management requirements. Question number two. In light of the draft of the EU directive published on the 21st of April, referring to improvements in nonfinancial reporting, it is the corporate sustainability reporting directive. I would ask you to tell us what you think this is going to mean for BAWAG and what your position is regarding this draft directive.

With the Corporate Sustainability Reporting Directive, CSRD, standardization, comparability of sustainability reporting is to be increased. The EU commission, for example, wants to broaden the scope and introduce recommendations for reporting standards. The EU Commission mentions GRI, UN Global Compact and the SDGs. BAWAG is already implementing a lot of that in its sustainability reporting. Since [ 2008, ] we've been reporting in accordance with the GRI standards and the UN Global Compact principles. The SDG reporting was introduced in the CSR report in 2020. Moreover, in recent years, the GRI reporting principles were extended and the reporting on sector-specific indicators, financial sector disclosures were integrated and improved. Moreover, according to the CSRD, an external auditing requirement is to be introduced for sustainability reports. We're already doing that on the basis of a limited assurance audit, and we are going to continue these developments.

Question number three. Climate change and its consequences, including for economic operators is one of the most important topics and challenges of our time. In the nonfinancial report of BAWAG, there are -- certain approaches are being taken with regard to climate reporting, but there is room for improvement. In particular, the guidelines of the task force on climate-related financial disclosures should be complied with. Could you give us an update on your activities and targets in order to integrate, the way of dealing with the opportunities and risks of climate change in the steering systems of the company. Well, as you can see, a great deal is happening in the field of sustainability. We have already introduced an internal project dealing with the collection of data and implementation of certain aspects. Reporting on the basis of the TCFD framework will be taken into consideration step by step. Question four, [indiscernible] the implemented sustainability organization of BAWAG? What are the goals pursued, the plans and the measures for the foreseeable period of time up to the next AGM? As I said during my presentation, we have already implemented a number of measures in 2021. The women's quota target has already been announced, and we plan to say more about that at our capital markets, at our Investor Day. We will be reporting on our medium-term ESG targets then. Question number five. In your materiality analysis for nonfinancial reporting, you are basing yourself on the results of a survey performed in 2018. It's a small sample, and that was before corona. How can you make sure that the findings obtained then are still valid today? And when do you intend to update your materiality analysis? Which concrete method will you apply in order to take account of the advanced state-of-the-art?

Your analysis is absolutely correct. We're just in the process of drafting -- or establishing a new materiality analysis, which will be disclosed in the CSR report, 2021.

Question number six. In your remuneration report, you say that the variable management report remuneration is based on ESG and leadership targets in the extent of 1/3. You also detail these -- give details on these targets on Page 12 of your report. But how do you operationalize the individual targets that is promotion of a risk and compliance culture within the group, promotion of the values of the group, integrity of daily task fulfillment and promotion of a meritocracy and entrepreneurial spirit, innovation and thought leadership. So how can you establish what an individual Management Board member has been doing in this respect? What are the current assessments for the business year 2021 for the individual members of the Management Board in terms of ESG and leadership target? Why don't you refer to specific nonfinancial performance indicators from the nonfinancial reporting to strengthen the management approach? So first, thank you for your feedback. It was indeed important for us to be transparent and to disclose the relevant targets. As to your questions, assessment of concrete target attainment is performed by the Remuneration and Nomination Committee of the Supervisory Board. In my capacity as Chairman of this committee, I can assure you the committee dealt with the aspects to be assessed in great detail. Processes are to be introduced, which ensure objective assessment. An assessment of the actual performance for 2020 was not made because the Management Board had indicated in advance that they waived their bonus for 2020. Question seven. Regarding Ms. Kapeller. She was ESG Officer of the BAWAG Group. Which findings have you obtained regarding the priorities in terms of sustainability on the basis of your activity? What is -- which role will you assume within the Supervisory Board in terms of sustainability issues? Do you intend to develop the profile of the sustainability expert? Which concrete priorities will you be setting? And what does sustainability mean for you personally?

An important finding at the beginning of my activity as ESG officer was that the BAWAG Group has already implemented many ESG aspects. In the first quarter of 2021, we announced that our lending to critical sectors would be either discontinued or limited. However, given our strategic orientation in recent years, we've had no or very little exposure to such industries, including coal, for example. As regards the role on the Supervisory Board, the BAWAG Group will be setting up an ESG Committee of the Supervisory Board. I will chair this committee. This ESG Committee supervises the sustainability strategy of BAWAG Group and will continuously inform on current issues. In my capacity as Chairwoman, I will contribute my knowledge and my experience. The establishment of the ESG Committee will make sure that sustainability is given even more attention. As regards my specific priorities, they will concern the identification of concrete targets and their concrete pursuit. Environmental issues will be at the focus of these activities. Numerous international and national activities have already been launched. The financial sector will contribute to the implementation of these initiatives. The importance of sustainability for me personally. Sustainability for me is the conscious and sparing use of resources, considering all social aspects. Through our consumer behavior, we can make an important contribution. It's important to be critical and to continuously inform about these issues.

Next question by Mr. [ Baumüller. ] I ask each of the Supervisory Board members standing for reelection to say something about what sustainability and -- sustainable, responsible corporate management means for them? Which contributions they intend to make to sustainable corporate management? And what their personal targets are for the new term of office? As a vote has to be taken on the elections of the Supervisory Board members, I will ask for individual comments from the Supervisory Board members to be reelected because I will use that as a basis for my vote. Well, I will answer on behalf of my colleagues. The topic of sustainability for us as BAWAG Group has gained an importance enormously in recent years. As Ms. Kapeller said in her comments, in the past, we have already done a great deal, but we have not always communicated that extensively to the public. Sustainable, responsible, corporate management for us means securing the economic success of our company sustainably. It only was a profitable business model, we can finance additional green and social aspects. The newly established ESG committee of the Supervisory Board is an essential step. What remains essential is to adjust our governance to new developments in the future. As you have seen, in the Environmental segment, we have taken important steps as BAWAG Group. In our lending criteria, we are excluding certain industries. At the beginning of this week, we issued our first green covered bond and so on. Further advancing these aspects will be an essential concern of us in the coming years. That holds for both the Supervisory Board and the company. Question nine. Within the framework of the AGM of Austrian Post on the 15th of April 2021, the following statement was made. It was agreed that the audit intensity would be increased to a sufficient assurance, though only for selected ecological topics and performance indicators in a next step. However, a more extensive sufficient audit assurance is to be given within the framework of the AGM of Telekom Austria on the 14th of May, similar statements were made. For many of you, this may be a terminological issue only, but it is a revolutionary development towards more relevant, more reliable and more complete disclosures on the sustainability performance of companies. The commission proposal of 21st April also points to a further development of the legal requirements in this respect. Therefore, could you briefly tell us to what extent BAWAG intends to follow this development in order to -- and to give us a first indication of the time schedule? Mr. Sirucic will answer the question.

We cannot comment on the plans and statements made by other companies. On our part, we have no time schedule, which we could disclose. In general, we expect that the audit intensity will increase over the years, but we have no specific plans yet.

Question number 10. What are the costs of the voluntary external audit of the nonfinancial reporting? Were other consultancy services used in connection with nonfinancial reporting. If so, please tell us who the providers were and what the costs are?

The costs were approximately EUR 26,000 for KPMG for the 2020 report and for advisory services for the CSR Report 2020 by [indiscernible] costs were less than EUR 3,000 between October and December 2020.

Question 11 by Mr. [ Baumüller. ] In the nonfinancial report on Page 11, we find a presentational corporate strategy. The claim there is committed to responsible, sustainable and profitable growth, considering ESG factors. In the individual target dimension shown there, sustainability topics, at least related to impact do not play a particular goal. There is a chapter on the CSR strategy, but there you do not find any clear statements on said partial strategy, but only on fundamental values, measures and the governance structure, which are, of course, good and important topics. My question, therefore, where can we find your detailed and concretely operationalized CSR strategy and which development steps are being planned?

Again, I would like to refer you to the CSR report where you find our CSR mission statement. It outlines our action areas and our targets per action area. These concern the economic success, ethics and integrity, responsibility to customers, sustainability in our core business, corporate social responsibility and personal commitment, HR development, diversity and equal opportunities as well as environmental and climate protection. The steps to be taken are also contained in the CSR report.

Last question by Mr. [ Baumüller. ] Recently, there were numerous critical media reports about BAWAG in the online standard. For example, BAWAG is giving and taking after the headcount cuts. BAWAG is giving up several floors on the ICON Tower. The stock options were allocated to the Management Board. I'm not saying anything about whether it makes sense or not to honor management commitment, but the adequacy is the question. And the tensions that exist between the different hierarchy levels. But this is connected to other questions. What's the gap between the highest and the lowest salaries, the highest and the lowest management Board remuneration and the gap to staff remuneration? Which concrete target are you aiming at? And how do you intend to calculate that in view of the remuneration gap? What about your internal communication with the works council regarding the internal tension? And what can you say as representatives of the company? I also ask the works council representative on the Supervisory Board to say something on that. Now I'd like to answer as follows: the question basically refers to Management Board issues. The average salary of a full term employee in 2020 was EUR 63,720. The lowest Management Board remuneration was EUR 3 million, the highest EUR 5.5 million. The target value, we don't have any, at least not now. As regards internal communication, over the years, we've had a very constructive communication and exchange with the works council, and that is important for the Supervisory Board and the Management Board. COVID-19 accelerated trends in the BAWAG business models. Customers are using online channels to a greater extent. We continuously adjust the bank to changing framework conditions and to position it well for the future. Our staff are the basis of the success of the BAWAG Group. And therefore, it's essential for us to be an attractive employer. Finally, you will have to understand that we do not comment on media reports. I think I have answered the questions by shareholder, [ Baumüller. ] So far we have received a number of questions, many have been answered already. And I now instruct that any questions we receive within the next 20 minutes sent to fragen.bawaggroup@hauptversammlung.at will be answered. After that moment, further questions will no longer be accepted. So questions received up to then will be answered by the Chairman. I also instruct that proposed resolutions can be sent and instructions can be given to the special proxies up until 20 minutes from now. Any resolutions and instructions received after that moment in time will not be accepted. In the live stream, you will be seeing this countdown of 20 minutes being inserted. I now move on to the next set of questions. These are the questions of Mr. Peter [ Meher. ] And the first question by Mr. Peter [ Meher ] is the following. It is quite sad that in spite of registration, I did not receive a printed annual report for BAWAG 2020. It's too difficult for me to read out the report on the screen. Are you making savings? Point 2, the dividend for 2019 was just a mini payment of EUR 0.54 per share. What is the remainder payment for 2019 and the proposed dividend for the business year 2020 per share? Are we allowed to calculate with a similar amount in future years?

I refer to the proposed resolution of agenda item 2, the proposal for the remainder payment for 2019 and 2020 is EUR 4.71 per share. The target for 2021 is an ROTCE of more than 15%. And in accordance with our dividend policy, we are planning to pay out 50% of net profit.

Thank you for answering this question. Next question on the statutory auditor. And Mr. [ Peter Meher ] is saying that if Deloitte is being elected, he would be voting against because Deloitte is a company he has very poor memories given the company-friendly experts. Well, we are not talking about Deloitte. We have proposed KPMG as our statutory auditor. And I think this settles the question. Next. Compensation of the Management Board at the Supervisory Board. What is the salaries of the remuneration for the Management Board, the fixed and the variable component and the bonus? How many Board members are there? In 2018, remuneration of the Board members amounted to EUR 26.88 million including a bonus of EUR 6.6 million. In 2019, this amounted to EUR 19.80 million and 0 bonus. And the remuneration of the Supervisory Board was EUR 413,000. And if you compare that with peer banks, you obtain the following picture. Erste Bank, 5 Board members; 2020 remuneration, EUR 11.3 million and EUR 30.7 million for 2019; 12 Supervisory Board members altogether, EUR 1.63 million as against EUR 1.49 million in 2019. RBI, 6 Board members, remuneration EUR 10.11 million respectively, EUR 15.6 million, 12 Supervisory Board members, remuneration, EUR 1.045 billion or EUR 1.070 billion. How can you account for the double amount of compensation paid to BAWAG Board members? Are they working twice as much? Or is the result so much better? The remuneration of the Supervisory Board of BAWAG are very moderate by comparison, but I'm not encouraging you to increase them. The remuneration of the Board members are outlined in the remuneration report. The number of Board members and Supervisory Board members has been presented during the presentations and in the explanations to the proposed resolution. Currently, the Board consists of 6 members, the Management Board, that is, and the Supervisory Board. If the AGM votes as proposed will consist of 9 persons of which 6 capital representatives and 3 works council representatives. On remuneration, we have an international team of Board members and a Supervisory Board. We are convinced that the remuneration of the Board members is adequate. It's the team that has driven the transformation of bank in recent years to a substantive degree and has massively contributed to the economic success of the BAWAG Group. I'm delighted that the Management Board members have extended their contracts until March 2026, which underlines the continuity at Management Board level. Next question of Mr. Peter [ Meher. ] Why is the management -- or the Supervisory Board stocked up from 5 to 6 capital representatives? What does that mean? And what is the new remuneration for 2021 and 2022? One correction, the Supervisory Board is being stepped up from 4 to 6 capital representatives and we are proposing this increase so that with the appointment of Ms. Schneider and Dr. Kapeller, we can further promote diversity on the board with regard to age, nationality, gender, professional background and industry knowledge. Ms. Schneider and Dr. Kapeller will be receiving the compensation adopted by the AGM for Supervisory Board members. For details, I would like to refer you to the remuneration report for the next year. The echo for this proposed extension has been more than positive. Next question. And that results -- relates to the result and outlook for 2021 and various related questions. The result of BAWAG in 2018, 2019 and 2020 and the outlook for the business year 2021? For cost-income ratio for 2018, '19 and '20, what is the amount of the nonperforming loans for those years? How did you cope with COVID-19? Did you apply for short-term work subsidies, and for which period and for how many staff members? How many people fell ill of COVID? What's the cost of the last AGM that was held in the presence of shareholders? And at the end of that meeting, I remember there was not even water to drink. And what are the costs for the virtual AGMs in 2020 and 2021? And I'd like to thank the Management Board and the -- and I think we should expect that they would be more modest when it comes to remuneration. And I'd like to thank in particularly the staff members through their hard work, it's possible to pay out a respectable dividend.

Regarding the financials, I'd like to refer to my report, agenda item 1 and also to the annual report of recent years. And I think we've dealt with that extensively. Regarding COVID-19, I did comment in my report, we did not apply for short-term work subsidies. And of course, there were some people who fell ill, but this did not impact our operations, especially the branch business. The total cost of the AGM in 2019 were approximately EUR 90,000 and in 2020, approximately EUR 80,000.

Thank you very much. This ends the questions asked by Mr. Peter [ Meher, ] and I now move on to the questions of shareholder, [ Stockhandle. ] And I will read out Mr. [ Stockhandle's ] comments. Dear members of the Management Board, and ladies and gentlemen in the back office. I'm filing a protest at the extraordinary general assembly. The Management Board ignored one of my questions, that's what happened. And I will ask my question again. It was read out, but then I was told that the question does not fit the agenda. And I'm wondering what your justification for not giving an answer will be this time. So I'll read out this question again. Questions on the amount of the dividends. I have 10 shares, but don't underestimate me, I could have 11 or 12. For production companies, many use indicators and parameters on stability, profitability of a company. And I always ask about debt repayment terms. That's a question I always ask. And the problem is you have debts. You're a bank, you have debts with savers and you use the money. You're not planning to pay back that money. What figure -- what parameter could you use in your annual report for debt repayment? And to give you an understanding -- an example, you have a small rural bank or savings banks and you're being approached. It needn't be one from Burgenland and offers itself to you as a branch, which figures would you check from the annual financial statements of that small bank?

I will try and provide an answer to that question. I'm not quite sure what you intend with this question. But I assume you're talking about the refinancing structure of the bank, and I will be talking about that. 60% of our refunding comes from customer deposits. The remainder comes from financings through the capital market, own emissions, long-term financing operations of the ECB and our own capital. We have a maturity profile for our issues. If you look at that, you will see that we place a strict focus on having assets and liabilities being matched and maturities being matched between the assets and the liabilities side. One special parameter -- there is no one special parameters. You'd have to take many generic parameters into account, LCR to -- loan-to-deposit ratio, leverage ratio. If you look at the ratio of debt and equity, for instance. So this is quite varied. And it's something you have to look at from a different perspective if you're dealing with a bank than with an industrial company.

Next question. You acquired HRLLO (sic) [ Hello ] from PNB Paribas (sic) [ BNP Paribas ] or planning to do so. Will you be receiving any compensation? Or are you paying, forking out some for that? And I learned from an AGM of a residential building bank that there is no gambling normally with small and solid entrepreneurs. But did somebody gamble with easybank? But let me be serious, which parameters -- which indicators did you use before your quote? The balance sheet total EBIT, staff numbers per customer, payout, income per staff members, et cetera, et cetera. Mr. Sirucic, maybe you can give us an answer on that?

I'd like to ask for your understanding that we cannot comment on the economic details of the transaction. This transaction is still awaiting official approval. In general terms, we also disclosed what our targets are. In our merchant acquisition strategy, we always perform due diligence, and we always look at the relevant parameters, and we expect a return on tangible common equity of more than 15%, and this is in line with our group target for the ROTCE. As I said, Hello Bank fits our business model very well and also our growth strategy. So it's a perfect match.

Thank very much for that. And again, easy versus Hello, the customer relation, how will the contribution margin develop in your expectation? What are the expected figures? I don't think you've bought that blind. How did you learn from the opportunity of acquisition or were you actually addressed by PNB (sic) [ BNP ]?

I have to be very brief here and can only ask for your understanding that we will not be commenting economic details on the transaction or the acquisition process. We cannot comment here.

Next question. How many man hours did you have to spend for deciding on the acquisition? And how many people were necessary for that? Actually -- and this applies not only to this project, we do not track records or hours spent on any project. What was specific to this transaction was that given the situation, all contractual negotiations were held virtually. Our core negotiation team consisted -- to give you a feel, consisted of 5 persons from our side. And then we had colleagues from various areas across the organization also involved in the course of due diligence and preparing the contract documentation. Thank you very much. What is the easy contribution to the group result in the last 3 business years? I would assume one would be pre-corona. You know that easybank was merged into BAWAG P.S.K. to simplify the group structure and also Südwestbank was merged into BAWAG. So there's no separate reporting on that. If you look at the past, the share of easybank in retail and Playlife (sic) [ PayLife ] was between 15% and 20%. Thanks for that. What is the percentage rate or participation of Cerberus, the savior of BAWAG? To our knowledge, Cerberus no longer holds a participation after it sell-down in December 2019. Next question, the book value of our share. As the balance sheet date, according to your calculation, the book value per share as per 31 December 2020 was EUR 38.93 with a total of 87,937,130 shares. Next question, it's a continuation of the earlier question. The number of shares underlying the book value and number of own shares. The share capital of the BAWAG Group is EUR 89,142,237, which is divided into 89,142,237 no par value shares. Currently, 287,190 own shares are being held. Next. Is the purchase price for Hello paid for in cash or in BAWAG shares? Again, I have to ask for your understanding that we cannot comment the economic details of the transaction. Purchase price, we never compensated the transaction with shares so far. Thanks for that. I have received a response to -- from Mr. [ Baumüller ] to our answers. And he thanks us for providing the answers and for all the effort involved, and he says that the information provided was very informative and well focused. And this would constitute best practice on the local capital market and should be a shining example, and BAWAG should be proud of that. And Mr. [ Baumüller ] also concedes that we are honestly trying to answer questions and that we are a much promising journey for the future, wishing us all the best. And he is glad to have been part of that journey. Thank you very much, Mr. [ Baumüller. ] And now the next set of questions, Mr. [ Baerga. ] And Mr. [ Baerga's ] first question. DAP was sold for EUR 354 million. The free float, further EUR 70 million were paid now. Hello bank was bought by BAWAG and nothing has come forth on the purchase price. I'd like to know, can you give us an approximate figure on the purchase price? This is something you need to include in your annual report anyway.

I have to be very brief. We cannot provide you with any details. And in the next annual report, you will find the requested information.

Hello bank has its headquarters in Salzburg. Will it stay there? Will you take over the staff? And when will you be converting to easybank? What's the exact date? I've been a long-term customer of Hello bank, and I'd like to know whether the telephone service up to 8:00 in the evening will be maintained? Other customers also appreciate these telephone hotline services. Or is everything being subject to Internet banking? What's the conversion cost from Hello bank to easybank?

Again, as I said, this transaction is still awaiting official approval. This is why at this moment in time, we cannot provide you with any details on the future strategy. For you as a customer, I know nothing will change. And so this hotline service up to 8:00 in the evening will also be maintained.

Next. To what extent had the swap with the City of Linz been depreciated? And how -- what's the provision made in terms of millions? And what's the devaluation amount? Regarding Linz, I'd like to ask Mr. Jestadt for an answer.

Thank you. As Mr. Sirucic told us that we've processed that from the capital side, this litigation. In the balance sheet, we have a liability or a claim, EUR 254 million in the books. That's the balance sheet perspective, and nothing has changed in recent years regarding that. Very briefly, on the status of litigation, that might be helpful. Let me provide you with the following information. The main case, the action and the counteraction, as you know, have been pending at the commercial court Vienna since 2011. That is the first instance court. In the course of the proceedings, the Vienna Commercial Court intimated that it would be meaningful to, first of all, have the question of the validity of the contract between BAWAG and the City of Linz clarified up to the last instance before dealing with any ensuing issues because the independence of the question, whether that was valid or not, the outcome of the proceedings will be totally different. So this is something that needs to be dealt with by the Supreme Court. So we are waiting for that. At the application of the City of Vienna, the Vienna Commercial Court issued a statement, a judgment on the question of the validity. That was then referred to the second instance and is now up for the third instance or Supreme Court to make that decision. We are waiting for this judgment to come forth for the next month. And once we've received this judgment, the main case will be taken up at the Vienna Commercial Court again. So this decision on validity or not does not tell us anything about mutual claims or funding between the parties. That is not the subject of the current proceedings on the validity. This is an ensuing question, a following question that will then be settled in a later stage. So I hope this would help as guidance for you.

Thank you for answering that. This brings us to the general questions of Mr. [ Baerga ] on the AGM. Question one, how many people were logged on, on Internet last year and abroad? How many people are logged on today on Internet in Austria and abroad? At the AGM in last October, 88 persons were logged on the German stream and 45 people on the English-speaking stream. So altogether, 133 persons together. We have 68 listeners in the German stream and 50 persons listening the English stream, altogether 118 persons.

Next question. How much did the printed annual report cost last year and this year? What is the circulation? How many copies? And how much -- what are the costs for Vienna, Taitung.

There have been no changes compared to last year. We didn't print any copies. The cost of publication of the report in Vienna, Taitung were EUR 95,000. That's a gross amount for the annual financial report published in Vienna, Taitung. We can't give you a figure yet because it will only be published after today's AGM. We are not using an external agency for our annual report, but only supporting software.

How much did the Extraordinary General Meeting 2021 cost, including costs of Vienna, Taitung? How many people were locked in at the Extraordinary General Meeting in Austria and abroad?

The costs -- the total costs were approximately EUR 60,000. 106 people were following the live stream, 62 in Germany and 44 in English.

Next question. What were the costs of the special proxies at the Extraordinary General Meeting and how many shareholders did they represent?

Well, this is not really representative at the Extraordinary General Meeting. We had a single agenda item. Therefore, the time taken for preparation was far less than it is for an AGM. 720 shareholders were registered, all represented by the special proxies, representing almost 67 million shares.

Next question. What were the rental costs for the ICON Vienna Tower last year? What's the term of the rental contract? And who is the owner?

So rent plus operating costs for the ICON Tower in 2020 were approximately EUR 9 million. The rental contract is for 20 years. It's running until 2038. The lessor is ICON Immobilien GmbH and [indiscernible], which was owned by the Allianz Group in 2020. The entire tower 8 of ICON has been rented.

How many people -- how many staff members were working at headquarters last year and how many this year? What was the staff turnover in 2018, '19 and '20? How many staff members retired for health reasons in 2019 and 2020?

At the beginning of the pandemic, we introduced a work from home regime, which enabled our staff members to work flexibly between working from home and in the office. We had a total of 4,071 staff members. Staff turnover was similar to prior years, 8% in 2018 and 2019, and 9% in 2020. And 279 -- sorry, 261 employees retired in 2020.

Next question. How many BAWAG staff members retired in 2019 and 2020? How many civil servants are still working for BAWAG P.S.K.? And how many of them retired in 2019 and 2020?

In 2020, 269 people retired. In 2019, 168. As of the end of 2020, we still had 41 civil servants on our payroll.

Next question. How much do you spend on cybersecurity and were you hacked last year?

Fortunately, we were not hacked last year. For IT security, we spent EUR 6.6 million.

Next question concerns our shareholder structure. What's the percentage of shares held by the American shareholders? Has Cerberus sold all its shares? If not, how many shares does Cerberus still hold? And who did Cerberus sell to during the past 2 years?

We have, according to our knowledge, a very broad-based investor base, approximately 80% of them from the Anglo-Saxon region. As regards to shares held by Cerberus, we have no specific information. But as far as we know, Cerberus no longer hold shares in BAWAG Group.

Next question. How many people are working in the back office today? How many of them are external workers?

3 colleagues are physically present in the back office. We are very efficiently organized. We have 1 external lawyer, but of course, other colleagues are available by e-mail or telephone for questions.

Next question about easybank. How many customers did easybank have in 2019 and 2020? How many were lost in 2019 and 2020?

The number of customers of easybank has remained relatively stable. Easybank and PayLife, altogether, 900,000 customers, easybank and PayLife.

Next question. How many people did you take over both DEPFA BANK? What's the total assets of DEPFA? How many customers do you gain through DEPFA? And how much did you spend on the purchase?

As I said in my presentation, DEPFA BANK is a wind-down facility. It's not a question of customer business, the total assets are very low. But here again, I can't give you any details about the transaction at this point in time.

Next question. How many branches does BAWAG have in Austria? How much did you spend on the modernization? How many branches were closed last year and where?

Currently, we have 82 branches in Austria. Last year, EUR 34 million were spent on the modernization of the branches. In 2020, 3 branches were closed, 2 in Vienna and 1 in Carinthia.

How much has BAWAG spent so far on court cases and on other litigation? Who is the law firm representing BAWAG in the Linz case?