EANS-Adhoc: Österreichische Volksbanken-Aktiengesellschaft / Announcement to repurchase of hybrid capital

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ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
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14.06.2012

ANNOUNCEMENT BY ÖSTERREICHISCHE VOLKSBANKEN-AKTIENGESELLSCHAFT AND
INVESTKREDIT RELATING TO THE PRELIMINARY RESULTS OF VOTING REGARDING
THE PREFERRED SECURITIES AND WITHDRAWAL OF THE SCHEME OF ARRANGEMENT
WITH AN INVITATION TO OFFER TO SELL FOR CASH NOT FOR DISTRIBUTION IN
THE UNITED STATES OR TO ANY PERSON RESIDENT AND/OR LOCATED IN THE
UNITED STATES OR TO ANY U.S. PERSON

Further to the announcements made on 22 May 2012, Österreichische
Volksbanken-Aktiengesellschaft ("ÖVAG") and Investkredit Funding Ltd
("Investkredit"), hereby announce:

(A) Preliminary results of voting in respect of the Proposals put to
holders of the Preferred Securities issued by ÖVAG Finance (Jersey)
Limited

As at today's date, voting instructions received in favour of the
Proposals set out in the invitation memorandum dated 22 May 2012
approximately account for 86.4 per cent. of outstanding liquidation
preference of holders of the EUR250,000,000 Fixed/Floating Rate
Non-cumulative Non-voting preferred securities issued by ÖVAG Finance
(Jersey) Limited (ISIN: XS0201306288 and Common Code: 020130628) (the
"Preferred Securities"). The meeting of the holders of the Preferred
Securities convened by ÖVAG Finance (Jersey) Limited will be held at
Clifford Chance, 4 Place de Paris, B.P. 1147, L-1011 Luxembourg,
Grand Duché de Luxembourg on 15 June 2012 at 12:00 noon, Central
European Time.

(B) Withdrawal of the scheme of arrangement by Investkredit Funding
Ltd and launch of an invitation to offer to sell for cash

(i) Today, Investkredit has withdrawn the scheme of arrangement (the
"Scheme") previously proposed pursuant to Part 18A of the Companies
(Jersey) Law 1991 in relation to the EUR50,000,000 subordinated
non-cumulative Limited Recourse Notes (ISIN: DE0009576108 and WKN:
957 610) issued by Investkredit on 28 November 2002 (the "Notes").
Today, ÖVAG and Investkredit have decided not to proceed with the
Scheme and will instead invite holders of the Notes to sell their
Notes to ÖVAG for cash pursuant to a tender offer announced and
further described under paragraph (ii) below. The meeting of holders
of Notes convened to consider the Scheme on 15 June 2012 starting at
12:00 noon Central European Time at the offices of Freshfields
Bruckhaus Deringer LLP, Seilergasse 16, 1010 Vienna, Republic of
Austria has been cancelled. For the avoidance of doubt, the
Invitation (as defined below) replaces the previously announced
Scheme, any direct participant letters previously submitted by
holders of the Notes in respect of the Scheme will be void and no
payments will be due to holders of the Notes pursuant to the Scheme.

(ii) Invitation to holders of the EUR50,000,000 subordinated
non-cumulative Limited Recourse Notes (ISIN: DE0009576108 and WKN:
957 610) issued by Investkredit Funding Ltd ÖVAG is inviting holders
of the Notes to offer to sell any and all of their Notes to ÖVAG for
cash (the "Invitation"). The terms and conditions of the Invitation
are set out in the Invitation Memorandum dated 14 June 2012 (the
"Invitation Memorandum"). The Austrian Financial Market Authority has
approved the purchase of the Notes. Capitalised terms used in the
following paragraphs of this announcement have the meanings ascribed
to them in such Invitation Memorandum.

Notes EUR50,000,000 subordinted non-cumulative Limited Recourse Notes
issued by Investkredit Funding Limited

Aggregate Outstanding Amount
EUR50,000,000

Clearing Codes
ISIN: DE0009576108 German Security Code: 957 610

Purchase Price
EUR400 per EUR1,000 nominal amount

Rationale for the Invitation

The Invitation for offers to sell Notes to ÖVAG for cash is part of
ÖVAG's ongoing capital management and based on an agreement with the
Republic of Austria. The aim of the Invitation is to enhance ÖVAG's
capital position by increasing common equity. As part of the
Invitation ÖVAG is offering Holders an opportunity to exit their
investment at a premium to current market prices.

Purchase Price to be Received for the Notes

ÖVAG proposes to accept for purchase any and all of the Notes on the
terms and subject to the conditions contained in the Invitation
Memorandum. Holders who have validly submitted an Electronic Order
prior to the Expiration Time and whose offers to sell are accepted by
ÖVAG will receive EUR400 per EUR1,000 nominal amount of the Notes
(the "Purchase Price") and the Accrued Interest Payment, in
immediately available funds in cash on the Settlement Date.

Participating in the Invitation

To offer to sell Notes pursuant to the Invitation, a Holder should
deliver, or arrange to have delivered on its behalf, through
Clearstream, Frankfurt and in accordance with the requirements of,
Clearstream Frankfurt, a valid Electronic Order that is received by
the Tender Agent by the Expiration Time. Holders are advised to check
with any bank, securities broker or other intermediary through which
they hold Notes whether such intermediary must receive instructions
to participate in the Invitation before the deadlines specified in
the timeline below.

Expected Transaction Timeline

Date Event

14 June 2012 Commencement of the Invitation and distribution of the
Invitation Memorandum.

5 p.m., CET, 28 June 2012 ("Expiration Time") The Invitation expires unless
ÖVAG extends or terminates it prior to the Expiration Time in its sole
discretion: deadline for receipt by the Tender Agent of Electronic Orders.

After this time, an Electronic Order may only be withdrawn in the
limited circumstances set out in the Invitation Memorandum.

29 June 2012 Announcement by ÖVAG of (i) whether it accepts offers
to sell; (ii) the aggregate nominal amount of Notes accepted for
purchase (which may be zero); and (iii) the aggregate nominal amount
of the Notes remaining outstanding following completion of the
Invitation.

4 July 2012 ("Settlement Date") Expected Settlement Date. If ÖVAG has
accepted offers to sell Notes, the Purchase Price and the Accrued
Interest Payment will be paid.

For further information: A complete description of the terms and
conditions of the Invitation is set out in the Invitation Memorandum.
Further details about the transaction can be obtained from:

DEALER MANAGERS

BNP Paribas
10 Harewood Avenue
London NW1 6AA
United Kingdom

Tel: +44 207 595 8668
Email: liability.management@bnpparibas.com

Citigroup Global Markets Limited
Citigroup Centre, Canada Square
Canary Wharf
London E14 5LB
United Kingdom
Tel: +44 (0) 20 7986 8969
Email: liabilitymanagement.europe@citi.com

TENDER AGENT

Citigroup Global Markets Deutschland AG
Reuterweg 16
60323 Frankfurt
Germany
Telephone: +49 69 1366 1424
Fax: +49 69 1366 1416
Email: frankfurt.tenderagent@citi.com

A copy of the Invitation Memorandum is available to eligible persons
upon request from the Tender Agent. Neither of the Dealer Managers
takes responsibility for the contents of this announcement and none
of ÖVAG, ÖVAG Finance Jersey Limited, Investkredit, the Dealer
Managers, the Tender Agent or any of their respective directors,
employees or affiliates makes any representation or recommendation
whatsoever regarding the Invitation, or any recommendation as to
whether Holders should tender Notes in the Invitation. This
announcement must be read in conjunction with the Invitation
Memorandum. No Invitation to acquire any Notes is being made
pursuant to this announcement. Any such Invitation is only being
made in the Invitation Memorandum and any such acquisition or
acceptance of offers to sell should be made solely on the basis of
information contained in the Invitation Memorandum. This
announcement and the Invitation Memorandum contain important
information which should be read carefully before any decision is
made with respect to the Invitation. If any Holder is in any doubt
as to the action it should take, it is recommended to seek its own
advice, including as to any tax consequences, from its stockbroker,
bank manager, solicitor, accountant or other independent adviser.

Jurisdictional Restrictions

The distribution of the Invitation Memorandum in certain
jurisdictions is restricted by law. Persons into whose possession
the Invitation Memorandum comes are required by ÖVAG, Investkredit,
the Dealer Managers and the Tender Agent to inform themselves about,
and to observe, any such restrictions. Holders with any questions on
the Invitation should contact the Dealer Managers for further
information.

United States The Invitation is not being made and will not be made,
directly or indirectly, in or into, or by use of the mails of, or by
any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone, email and other forms of
electronic transmission) of interstate or foreign commerce of, or any
facility of a national securities exchange of, the United States, and
no offer to sell Notes may be made by any such use, means,
instrumentality or facility from or within the United States, or by
any U.S. Person (as defined in Regulation S of the United States
Securities Act of 1933, as amended (each a "U.S. Person")) or by
persons located or resident in the United States. Accordingly, copies
of the Invitation Memorandum and any other documents or materials
relating to the Invitation are not being, and must not be, directly
or indirectly, mailed or otherwise transmitted, distributed or
forwarded in or into the United States, or to U.S. Persons or to
persons located or resident in the United States. Any purported offer
to sell Notes resulting directly or indirectly from a violation of
these restrictions will be invalid and offers to sell Notes made by a
U.S. Person, by any person acting for the account or benefit of a
U.S. Person, or by a person located or resident in the United States
or any agent, fiduciary or other intermediary acting on a
non-discretionary basis for a principal located or resident in the
United States will not be accepted. For the purposes of this
paragraph, United States means the United States of America, its
territories and possessions (including Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands), any state of the United States of America and the District
of Columbia.

Italy None of the Invitation, the Invitation Memorandum or any other
documents or materials relating to the Invitation have been or will
be submitted to the clearance procedure of the Commissione Nazionale
per le Società e la Borsa (CONSOB). The Invitation is being carried
out in the Republic of Italy (Italy) as an exempted offer pursuant to
article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of
24 February 1998, as amended (the Financial Services Act) and article
35-bis, paragraph 3, of CONSOB Regulation No. 11971 of 14 May 1999,
as amended ("CONSOB Regulation"). Holders can offer the Notes
through authorised persons (such as investment firms, banks or
financial intermediaries permitted to conduct such activities in
Italy in accordance with the Financial Services Act, CONSOB
Regulation No. 16190 of 29 October 2007, as amended from time to
time, and Legislative Decree No. 385 of September 1, 1993, as
amended) and in compliance with applicable laws and regulations or
with requirements imposed by CONSOB or any other Italian authority.

United Kingdom The communication of the Invitation Memorandum and any
other documents or materials relating to the Invitation are not being
made and such documents and/or materials have not been approved by an
authorised person for the purposes of section 21 of the Financial
Services and Markets Act 2000. Accordingly, such documents and/or
materials are not being distributed to, and must not be passed on to,
the general public in the United Kingdom, and are only for
circulation to persons outside the United Kingdom or to persons
within the United Kingdom falling within Article 43 of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
"Order"), or to other persons to whom it may lawfully be communicated
in accordance with the Order.

Belgium The Invitation Memorandum is not addressed to, and may not be
accepted by, any Holder or Registered Holder who is resident in
Belgium and is not a qualified investor (investisseur
qualifié/gekwalificeerde belegger) as defined pursuant to Article 10
of the Belgian law of 16 June 2006 on public offerings of investment
instruments and the admission of investment instruments to trading on
regulated markets.

France Neither the Invitation Memorandum, nor any other offering
material or information relating to the Invitation, has been
submitted for clearance to the Autorité des Marchés Financiers and
they may not be released, issued, or distributed or caused to be
released, issued, or distributed, directly or indirectly, to the
public in the French Republic, except to (i) providers of investment
services relating to portfolio management for the account of third
parties and/or (ii) qualified investors (investisseurs qualifiés),
other than individuals, all as defined in, and in accordance with,
Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code
Monétaire et Financier.

General Neither the Invitation Memorandum nor the electronic
transmission thereof constitutes an offer to buy or the solicitation
of an offer to sell the Notes (and any offer to sell the Notes
pursuant to the Invitation will not be accepted from Holders) in any
circumstances in which such offer or solicitation is unlawful. In
those jurisdictions where the securities, blue sky or other laws
require the Invitation to be made by a licensed broker or dealer and
the Dealer Managers or any of its affiliates is such a licensed
broker or dealer in any such jurisdiction, such Invitation shall be
deemed to be made by the Dealer Managers or such affiliate, as the
case may be, on behalf of ÖVAG in such jurisdiction. In addition to
the representations referred to above in respect of the United
States, each Holder participating in the Invitation will be deemed to
give certain representations in respect of the other jurisdictions
referred to above and generally as set out in the Invitation
Memorandum. Any offer to sell Notes made by a Holder that is unable
to make these representations will not be accepted.

Stock exchange listed issues of participation capital issued by
Österreichische Volksbanken-Aktiengesellschaft: ISIN: AT0000755665
Österreichische Volksbanken-AG Partizipationsscheine XS0359924643 EUR
500,000,000 Perpetual Non Cumulative Participation Capital
Certificates

The five biggest listed issues of Österreichische
Volksbanken-Aktiengesellschaft in terms of issue volume: ISIN:
XS0451759012 XS0417722393 AT000B053442 XS0275528627 AT000B061437

The issues of Österreichische Volksbanken-Aktiengesellschaft are
admitted on the following stock exchanges:

Second Regulated market of Wiener Börse AG
Official trading of Wiener Börse AG
Regulated market of Baden-Württembergische Wertpapierbörse
Regulated market of the Prague Stock Exchange
Regulated market of the Luxembourg Stock Exchange
Open Market of Berlin Stock Exchange
Open Market of Stuttgart Stock Exchange
Open Market of Frankfurt Stock Exchange

Further inquiry note:
Walter Gröblinger
Tel.: +43/ (0) 50 4004-0
E-Mail: walter.groeblinger@volksbank.com

end of announcement euro adhoc
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issuer: Österreichische Volksbanken-Aktiengesellschaft
Kolingasse 19
A-1090 Wien
phone: +43 0 50 4004-0
WWW: www.volksbank.com
sector: Banking
ISIN: AT0000755665
indexes: Standard Market Auction
stockmarkets: Regulated free trade: Wien, stock market: Prague Stock Exchange
language: English