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- Capital gains in 2006, which are included in the item Net income from investments, resulted, first, from the sale of our Croatian banking subsidiary HVB Splitska banka d.d., Split. The capital gain realised in the second quarter of 2006 amounted to € 684 m. The sale was effected to comply with merger control requirements; with Zagrebačka banka and its market share of 24 %, UniCredit is already the number 1 bank in Croatia.
- The largest one-off effect recorded in the year was, second, the capital gain of € 1,545 m on the transfer of Bank BPH S.A., Kraków, to UniCredit. The closing of the sale took place at the beginning of November 2006. This Group-internal transfer at arm’s length was not originally planned but became necessary because the new Polish government had specified additional conditions for a partial merger of the local banking subsidiaries. One of the conditions was that the parent company of UniCredit Group should have direct responsibility for operations in Poland.
- Finally, as part of the bundling of mutual fund business, we transferred our equity interests in the subsidiaries of the former Capital Invest (now Pioneer Investments Austria, PIA) in Hungary and Croatia to Pioneer Investments, resulting in capital gains of € 38 m in 2006.
The combined effect of the capital gains mentioned above increased net income from investments by € 2,267 m. The transactions were effected at arm’s length and on the basis of independent valuations confirmed by fairness opinions. The capital gains reflect expansion over many years and the market position achieved in Croatia and Poland and in CEE investment business. In this respect they are to be seen as operating income although, when interpreting the bank’s underlying performance trend in 2006, the capital gains are to be taken into account as one-off effects. On the other hand, in analysing results for 2006, one should note that the income statement for 2006 reflects HVB Splitska banka’s results for only six months and Bank BPH’s results for only ten months.