Volksbank Vorarlberg e. Gen.

Note on bank-specific adaptation: concepts such as gross profit, EBITDA, working capital, capex/FCF and cash conversion cycle are not meaningful for a bank under UGB/BWG and are not reported. They are marked not applicable. Bank-appropriate equivalents are provided. EPS is not applicable (cooperative; no shares in the corporate sense); dividends per participation certificate are shown instead.

Income statement

Sources: AR 2025 (FY2024–FY2025 income statement); ORF Vorarlberg (FY2022–FY2023 NII and net profit); VOL.AT (FY2023 operating result, EGT). FY2021 dividend was also EUR 0.87 (Vienna Stock Exchange notice, paid 5 May 2022); it is shown here in text because the FY2021 column is otherwise blank. FY2022 dividend EUR 0.87 paid 4 May 2023; FY2025 dividend EUR 0.51 proposed to the April 2026 AGM.

Commentary. The five-year arc is a textbook rate-cycle profile for a deposit-funded, fixed-rate-heavy lender. Net interest income rose 31% in 2023 as the ECB raised rates and loan repricing outpaced deposit pass-through, delivering net profit of EUR 13.38 M. From mid-2024 ECB cuts compressed asset yields faster than funding costs: interest income fell 25.8% in 2025 while interest expense fell 37.9%, but the net result was still a 5.6% NII decline. Simultaneously, operating expenses rose 6.6% in 2025 (personnel +5.3%, other administrative +9.8%, driven by IT at EUR 5.8 M and Verbund recharges at EUR 13.6 M), so the operating result fell for a second consecutive year to EUR 5.19 M. The 2023 EGT of EUR 17.30 M exceeded the operating result, implying net provisioning releases or valuation gains that year; by contrast, 2024 absorbed EUR 6.46 M of net loan-loss charges (two-thirds higher than prior year per ORF). 2025 benefited from lower net risk costs (EUR 3.55 M) and a EUR 3.0 M upstream subsidiary dividend, but the tripling of the bank levy (EUR 0.71 M incl. a special payment) and a EUR 0.74 M deferred-tax charge pushed net profit to EUR 0.63 M — the weakest result in the observable period.

Margin and efficiency ratios

Sources: AR 2025 key-figure table; last row derived. Gross, operating, EBITDA margins in the industrial sense: not applicable.

Commentary. A cost-income ratio above 90% is very high for an Austrian regional bank; the Vorarlberg savings banks reported 51.2% for 2022 and Hypo Vorarlberg 41.7% for 2023. The structural issue is scale: a ~EUR 48 M cost base on ~EUR 53 M income leaves almost no buffer for risk costs.

Growth rates

NII CAGR FY2022–FY2025: ≈4.8% p.a. (derived: 25.90 → 29.79 over three years). Revenue CAGR on total operating income cannot be computed over five years because FY2021–FY2023 operating income is not disclosed in located sources.

Balance sheet

Sources: AR 2025 balance sheet and Management Report; FY2023 total assets ("rund 1.96 Mrd.") from bank website and ORF; FY2023 loans and deposits from VOL.AT; FY2022 deposits from ORF. FY2023 values are rounded as published.

Debt structure (bank adaptation). The relevant "debt" is wholesale funding from the Verbund (EUR 525.8 M at end-2025), securitised own issues (EUR 15.1 M) and Tier 2 (EUR 3.1 M on balance sheet after a scheduled EUR 7.5 M redemption in 2025). Net debt and working capital are not meaningful for a bank.

Funding and liquidity structure

Source: AR 2025 maturity tables and key figures (Ausleihungsgrad II).

Commentary. The deposit franchise has shifted decisively toward on-demand balances (73% of customer deposits at end-2025 vs. 63% a year earlier), consistent with strong inflows into "Save & Cash"-type sight savings. This lowers funding cost but increases behavioural liquidity risk and rate sensitivity. Simultaneously, Verbund term funding maturing in 1–5 years fell by EUR 95 M as the bank replaced wholesale funding with retail deposits. The loan-to-deposit ratio above 130% means the bank remains a structural net borrower from the Verbund liquidity pool.

Capital (regulatory, single-entity disclosure)

Sources: AR 2025; ORF Vorarlberg (FY2022–FY2023); VOL.AT (FY2023–FY2024).

Commentary. Capital ratios declined about 180 bp in 2025, attributed by management to strong loan growth and the entry into force of CRR III ("Basel IV") with revised risk weights. Note that minimum requirements and SREP add-ons apply only at Verbund level; the single-entity ratios are informational. The decline in Tier 2 reflects scheduled amortisation and the loss of eligibility of residual PS capital after ECB approval of the buyback programme.

Return and risk ratios

Sources: AR 2025 (Gesamtkapitalrentabilität per § 64 BWG); other rows derived. ROIC, current ratio, net debt/EBITDA, interest coverage, asset turnover and cash conversion cycle: not applicable to a bank.

Commentary. Profitability is now well below any plausible cost of capital. However, leverage is conservative (equity ≈8.8% of total assets on a UGB basis), and the large fund for general banking risks (EUR 32.1 M) plus § 57 BWG general provisions (EUR 9.6 M counted as Tier 2) provide hidden-reserve style buffers typical of Austrian GAAP banks.

Management guidance

No quantitative guidance is published. Qualitative signals: growth with customers across the Verbund was the stated 2025 priority; the leasing subsidiary is moderately confident of rising new business in 2026; the Board expects continued focus on regional lending, ESG transformation, digitalisation and service. The outlook cites IMF/WIFO expectations of Austrian growth above 1% in 2026 while warning of oil-price-shock downside.

Consensus expectations

Not available — no analyst coverage.

Bull case

1. Volume engine is working: Loan growth of 5.5% and deposit growth of 11.3% (best in the Verbund) show the franchise can gain share; once rates stabilise, volume growth should translate into NII growth.

2. Credit cost normalisation: Net risk charges already halved in 2025, and the Verbund's H1 2026 risk provisions fell almost 90%, pointing to a benign 2026 risk-cost line.

3. Fee diversification: Securities fees +12.4%, award-winning asset management, new mandates and leasing expansion can lift the fee share above 40% of income.

Bear case

1. Structural cost problem: A 90% CIR leaves the bank one bad credit year away from losses; cost growth (+6.6%) outpaced income (+1.4%) in 2025.

2. Capital erosion: Tier 1 ratio down 180 bp in a year with almost no retained earnings to rebuild it; CRR III and growth will continue to absorb capital.

3. Concentration and sector risk: Real estate, construction and tourism exposures in a single small province; Stage 2 migrations already in place.

Catalysts and monitorables (next 12 months)

Concluding analyst verdict

Volksbank Vorarlberg is a well-run commercial franchise trapped in a structurally unprofitable cost structure. On the customer side, the evidence is unambiguously positive: the bank grew loans and deposits faster than any other member of the Volksbanken-Verbund in 2025, lifted its NPS to more than double the Austrian sector average, opened new distribution points while competitors retrench, and operates an asset-management unit that outperforms national benchmarks and serves the entire network. Membership rose to over 19,000, and the cooperative model delivers a loyal, regionally anchored deposit base.

The financial side tells a sharply different story. Net profit has fallen from EUR 13.4 M in 2023 to EUR 0.6 M in 2025, and the cost-income ratio of 90% is roughly double that of its larger Vorarlberg peers. Interest-rate normalisation exposed how much of the 2023 performance was cyclical. Costs are rising faster than income, Verbund recharges are a large and only partly controllable burden, and the bank levy and CRR III add pressure. Single-entity capital ratios remain comfortable at around 17–18%, and the Verbund provides a robust liquidity and solvency backstop, so this is not a solvency story — it is a returns story.

For creditors and depositors, the profile is stable, underpinned by the § 30a BWG liability association, conservative leverage and significant general-risk reserves. For the residual participation-certificate holders, the instrument is illiquid and being retired, with a fixed EUR 0.51 dividend. For strategic observers, the central question is whether a EUR 2 bn bank can achieve adequate returns independently within the Verbund. Absent a step-change in fee income or cost efficiency over the next two to three years, pressure for deeper network integration or consolidation is likely to grow. Overall assessment: Stable credit, weak profitability, strong franchise — operational restructuring is the key watch item.

---

End of dossier. No figures have been estimated.