2. Materiality

The company discloses the aspects of its business operations that have a significant impact on sustainability issues and what material impact sustainability issues have on its operations. It analyses the positive and negative effects and provides information as to how these insights are integrated into the company’s processes.

OLB is a modern financial institution which mainly assumes important functions for the economy by granting loans and managing deposits. The Bank’s business activity has a solid, steady and long-term orientation and is based on a sustainably profitable business model. From a corporate point of view, OLB strives for commercial success and names, as essential pillars of its business strategy, a wide customer base, competent and committed employees as well as stable re-financing sources combined with a mature risk management. OLB considers the respect for the interests of clients, employees and shareholders as being important factors for a successful implementation of its strategy.
A trusting and successful cooperation with clients is mostly based on long years of business relations. It is important for the Bank that clients receive understandable and transparent products and consulting services at fair prices.

In addition to this economic aspect, OLB’s objective is to act sustainably also in the ecological and social sense. The Bank aligns its business activities, inter alia, on the UN Principles for Responsible Banking. Its OLB-Stiftung (Foundation) promotes projects and initiatives each year because the Bank not only wants to care for people as a competent financial partner, but also as a company which assumes social responsibility (see criterion 18: “Corporate Citizenship“).
The Company naturally respects the topics of environment, employee rights, social matters, human rights and the fight against corruption and bribery that are described herein. In its role as financing partner, in particular, for medium-sized companies and private clients, in case of need, the Bank relies on predictability and longevity. Cash deposits provided by clients form the most important and also solid source of refinancing for granting loans. Economic, ecological and social objectives interact in a manner that they should result in a sustainable increase of the goodwill.
In addition to ecological or social conditions and challenges which are considered, inter alia, in the Bank‘s corporate financing decisions and capital market offers, OLB is exposed to the influences of external factors coming from the market environment for Banks as described below. In general, OLB actively shapes the social and technological change, currently mainly in view of digitalisation.
The financial industry has been shaped not only by digitalisation but also by increasing regulations and by the continuing low interest rate phase. Both the legislator and supervisory bodies impose an increasing number of measures on financial institutions to strengthen their equity and liquidity and for consumer protection which OLB implements in its business operation. As a consequence of these standards, it is mainly the quantitative and qualitative requirements to the liable equity and the liquidity position of Banks that are raised. Digitalisation of business models and processes caused by increasingly changing client conduct and the fierce competition, including new companies from the FinTech sector entering the market, exert strong pressure on existing credit institutions to adapt. The low interest rate levels which have been prevailing for a long time now, mean that banks with a high number of services are no longer able to generate significant earnings. A rapid departure from this expansive monetary policy is not to be expected. So, in addition to the pressure on earnings, the costs arising for implementing the regulatory requirements which are becoming more stringent will rise even more.
In the 2020 reporting year, another essential external factor was added with the breakout of the Corona virus pandemic. Against this backdrop, both the need for consulting rose, in particular for companies and self-employed persons affected by the Corona crisis regarding the provision of public subsidies and government aid, and the number of bank employees working at mobile workstations from their home. In parallel, the Corona virus pandemic was a driver of digitalisation, mainly for payment transactions, since card payments rose, and cash payments declined in this connection in the entire industry.
But even regardless of the Corona pandemic, the needs and behaviour of clients are changing and increasingly adapt to the digital customs of their every-day life. Personal advice remains the most important element for OLB, even in the digital age and a core competency in client business. Simultaneously, however, the Bank will continuously increase the availability and service offer via digital channels such as phone, internet and video chat. Digitalisation offers the opportunity for providing numerous services, regardless of physical locations and opening hours and to increase the efficiency by automated business processes. One risk factor is, however, the willingness to accept these offers among clients still wishing to have access to a branch office of their bank, despite these alternative options being available. One positive aspect of the increasing use of digital media from the point of view of sustainability is the use of paper which has been declining over the past years, mainly since information and letters are provided in digital mailboxes (see criterion 10 “Innovation and Product Management” and 12 “Resource Management“).