Balance sheet 2023

Hypo Tirol Bank: EUR 10.06 million goes to the state

Hypo Tirol is the only state bank, and every Tyrolean owns a piece of it. The "Krone" therefore takes a detailed look at the balance sheet for the 2023 financial year. Exciting: in addition to the bare figures, there are also some new developments to announce, most of which are to be implemented this year. 

The hard facts first: the balance sheet for the 2023 financial year shows a pre-tax profit of 62.21 million euros in a generally positive market environment in the banking sector. "This is one of the best, if not the best result the bank has ever achieved," emphasized CEO Alexander Weiß in an interview with Tiroler Krone. The balance sheet total fell as planned to 7.96 billion euros, while the core capital ratio of 17.64% and the equity ratio of 19.61% were further increased at a high level. "The distribution to the owner, i.e. the province of Tyrol, amounted to 10.06 million euros. This allows us to achieve a lot," says Weiß and draws the following conclusion: "We are a reliable dividend payer." 

"This enables the financing of important public projects"
The capital market's trust in Tiroler Landesbank became clear in spring 2024: Hypo Tirol Bank was able to successfully place 250 million euros on the international capital market via a public Pfandbrief. This was sold out within an hour - the issue was oversubscribed twice over. "47 institutional investors from the eurozone bought in. This enables the financing of important public projects in the province via municipal loans and the refinancing of Hypo Tirol Bank at the best conditions," emphasizes Weiß. 

"We have a firm focus on the market and people"
Chairman of the Supervisory Board, Wilfried Stauder, is satisfied with the results and adds: "In this phase of new beginnings, we as a state bank have our sights firmly set on the market and the people. We are investing heavily in the long-term success of the bank in order to ensure developments in the Tyrolean living and economic area. As a financial partner of choice, we want to work tangibly in the region and effectively for all clients." 

"Think globally, but act strictly regionally"
Since Weiß and his two colleagues Susanne Endl and Andreas Stadler were appointed as the new Management Board trio in May 2023, the bank has "developed a lot" - "from a regional bank, which we always want to be and remain, a good step towards the digital world", explains Weiß. The credo is: "Think globally, but act strictly regionally." In concrete terms, this means that although the digital world takes up a certain amount of space, the focus is still on personal advice. "Combining locality with a global product range and offering this simply is exactly what a regional bank like us is all about," the CEO clarifies. 

The CEO cites specific examples: "For projects that Tyroleans undertake once in a lifetime - such as buying an apartment or a house, building a hall as an entrepreneur or expanding a hotel as a hotelier - Tyroleans want to feel that their bank advisor and decision-maker is right there with them and have the certainty that they will still be there after the loan has been signed - and for the entire term." Hypo Tirol Bank is on its way to becoming "a modern digital, but also analog advisory bank".

In this phase of change, we as a regional bank have the market and the people firmly in our sights.

Aufsichtsratsvorsitzender Wilfried Stauder

Innrain location, residential center, special center for companies
For this reason, "a lot of money will be invested in the expansion of both sectors", which brings us to the new developments. "We will invest heavily in our location at the Tilak site on the Innrain in Innsbruck and create a center for freelancers. At another very central location in Innsbruck, which cannot yet be communicated, we are creating a residential center. There, we will be providing a massive amount of customer advice on all aspects of buying an apartment or house. Customers will be given the opportunity to prepare for the consultation digitally in advance and will be able to fill in traditional information such as their place of residence etc. so that they can immediately concentrate on the essentials with the consultant and thus save time," explains Weiß. 

In addition to freelancers and private customers, the focus is also on entrepreneurs. There is already a special center for companies, but they now want to round it off. "Because Tyrol has a very medium-sized economy, we want to make a massive push into the SME sector and offer appropriate advice in this center," explains the CEO. 

Two of the three projects are to be realized this year
The adaptations to the Innrain site and the construction of the residential center are to be completed this year. The expansion of the special center for companies is expected to be postponed until 2025. 

There is also another new development: according to Weiß, interest rates are slowly falling. Specifically, there is talk that the ECB will reduce interest rates from summer 2024. "We have therefore decided to increase the daily online interest rate here for a certain period of time - from 2.65 to 2.70 percent. We are very far ahead of the rest of Austria. In this way, we are giving the Tyrolean something back from his bank," announces Weiß. 

Hypo Tirol Bank functions on Garmin-Watch
Keyword digitalization: The takeover of ARZ (Allgemeines Rechenzentrum GmbH) by Accenture - a global group - in January 2023 represents a strong impetus for the location to noticeably exploit the opportunities of digitalization in Tyrol. Weiß: "We strive to look for the best in the world, package it and make it available to Tyroleans as a strictly regional bank." The new Hypo Tirol Bank functions on the Garmin Watch are an example par excellence. "You can save all your account and credit card details on this sports watch and use them to make payments anywhere without any complications. That already works," reports Weiß.

It costs "a lot of money" to "be up-to-date" in this area. This globally active software group "definitely offers us the necessary support in the high-tech area, which allows us to optimize processes," Weiß is convinced.

Residential construction financing: "We feel certain concerns"
Residential construction financing continues to be a difficult topic. There are certain concerns among the population. "Interest rates are now set to fall. But that doesn't mean that this will automatically affect all interest rates. It seems that short-term interest rates will go down, medium and long-term interest rates will not. The worst advice is to put all your eggs in one basket. You have to mix between a variable and fixed interest rate - and also consider different terms. In addition, you must always take into account whether a customer will receive a payment at a certain time, such as a severance payment. In this case, a variable interest rate is more advantageous. But you can't find all this out online, you need an advisor for this," says Weiß. At Hypo Tirol Bank, it is "in no way about a quick deal", but the task of the state bank is "to advise, to be constant and sustainable". 

And what about the good old savings book? "It has declined somewhat, but it is still a good short-term reserve in the form of three months' salary - for example for the famous washing machine that suddenly gives up the ghost, or the winter tires that are worn out, or the exhaust pipe that rusts through," advises Weiß. 

"Fund savers are a good alternative"
On the other hand, people rarely think about investments. "Many people think it's very complicated, but that's not true. Fund savers, for example, are a good alternative. If I save around 30 euros a month, I have the effect that if the markets go down, I still get more shares for the same amount," explains Weiß and makes an "interesting comparison": "If a supermarket chain offers a detergent at a very low price, everyone rushes in and buys it. But when prices on the financial market go down, everyone is afraid and says they'd rather buy when the price is high. That's actually strange." You have to talk to customers about this - explain to them that the compound interest effect creates an extreme increase in value over a long period of time. 

"Top rating among domestic financial institutions"
According to Weiß, the following applies in principle: "The hard currency of banks is trust and security." Hypo Tirol Bank has a top rating among Austrian financial institutions. "The world's largest rating agency Standard & Poor's raised the long-term bank rating from A to A+ in 2023 - stable outlook. In addition, an upgrade to a top rating followed in fall 2023: Moody's raised the credit rating for Hypo Tirol's public Pfandbriefe by one notch from Aa1 to Aaa - and thus to the highest possible category," the CEO proudly lists.

"We do not have a shortage of employees"
The Landesbank has around 90,000 clients and around 560 employees. So there is no sign of a shortage of employees? "The market is challenging for everyone, but we don't know of any shortage, no. Many of the big banks have transferred functions to the head office, which is in Vienna or another country, for example. Hypo Tirol is one of the few banks that is a full-service bank - everything is united under one roof. We therefore have extremely interesting jobs to offer. We also have a trainee program and apprentices - currently around ten to 15. There are even some who started with us as apprentices and now hold a management position within the bank," says Weiß. In addition, the bank also goes to great lengths to ensure that employees stay for the long term.