A LISTING OF SECURITIES ON A REGULATED MARKET BASED ON THIS BASE PROSPECTUS IN THE YEAR 2011 SHALL BE PROHIBITED. Base Prospectus

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1 THIS BASE PROSPECTUS HAS BEEN APPROVED BY THE FINANZMARKTAUFSICHTSBEHÖRDE ("FMA") IN ITS CAPACITY AS COMPETENT AUTHORITY UNDER THE AUSTRIAN CAPITAL MARKETS ACT 1991 ("CAPITAL MARKETS ACT"), AS AMENDED.THE ACCURACY OF THE INFORMATION CON- TAINED IN THIS BASE PROSPECTUS DOES NOT FALL WITHIN THE SCOPE OF EXAMINATION BY THE FMA UNDER AUSTRIAN LAW AND DIRECTIVE 2003/71/EC OF THE EUROPEAN PARLIAMENT AND THE COUNCIL OF 4 NOVEMBER 2003 (THE "PROSPECTUS DIRECTIVE"), AS AMENDED. THE FMA EXAMINES THE BASE PROSPECTUS ONLY WITH RESPECT TO ITS COMPLETENESS, COHER- ENCE AND COMPREHENSIBILITY PURSUANT TO SECTION 8A PARA 1 OF THE CAPITAL MARKETS ACT. A LISTING OF SECURITIES ON A REGULATED MARKET BASED ON THIS BASE PROSPECTUS IN THE YEAR 2011 SHALL BE PROHIBITED. Base Prospectus pursuant to Section 7 para 4 of the Austrian Capital Markets Act of 22 September 2011 regarding the Offering Programme 2011/12 of CAPITAL BANK GRAWE GRUPPE AG for the public offer of debt and derivative securities in Austria, Germany, the Czech Republic and Hungary,

2 2 GENERAL INFORMATION AND SELLING AND OFFER RESTRIC- TIONS This Base Prospectus has been approved by the Finanzmarktaufsichtsbehörde ("FMA") in its capacity as competent authority under the Austrian Capital Markets Act 1991 ("Capital Markets Act"), as amended. The accuracy of the information contained in this Base Prospectus does not fall within the scope of examination by the FMA under Austrian law and Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 (the "Prospectus Directive"), as amended. The FMA examines the Base Prospectus only with respect to its completeness, coherence and comprehensibility pursuant to section 8a Para 1 of the Capital Markets Act. Under the offering programme (the "Programme") described in this Base Prospectus, CAPITAL BANK GRAWE Gruppe AG, (hereinafter referred to as CAPITAL BANK or Company ) may from time to time issue debt securities (such as senior notes) and derivative securities (such as performance linked notes, and warrants) as bearer securities (Inhaberpapiere), in each case, that are subject to Austrian law (the "Offer Securities") for a period of 12 months from the date of which this Base Prospectus will be published. The nominal amount of the Offer Securities or the pro rata amount of the respective unit of a certain series of the Offer Securities, the issue currency, the interest payable in respect of the Offer Securities, if any, the issue prices and maturities of the Offer Securities and all other terms and conditions not contained herein, which are applicable to a particular series of Offer Securities for each offer of Notes or of Warrants, will be set out in the document containing the final terms within the meaning of Article 26 no. 5 of the Commission Regulation (EC) No. 809/2004 (the "Final Terms"). The Offer Securities may be denominated in Euros or any other currency as set out in the Final Terms. This Base Prospectus (the Base Propectus ) should be read and construed in conjunction with the supplements, if any, to this Base Prospectus. The final terms and conditions as published in the respective Final Terms of a series of Offer Securities should be read in conjunction with this Base Prospectus and the respective supplements, if any, which shall be prepared by the Issuer in accordance with section 6 of the Austrian Capital Markets Act (Kapitalmarktgesetz). The Issuer is obliged by the provisions of the Prospectus Directive and section 6 of the Austrian Capital Markets Act, that if at any time during the duration of the Programme at which there is an ongoing public offer under this prospectus, a significant new factor, material mistake or inaccuracy relating to information contained in this Base Prospectus occurs which is capable of affecting the assessment of any Offer Securities, the Issuer shall prepare an amendment or supplement to the Prospectus or publish a replacement Prospectus for use in connection with any subsequent offering of the Offer Securities and shall supply to the FMA such number of copies of such supplement or replacement hereto as the Capital Markets Act and/or any other statute or regulation may require. This Base Prospectus follows the Base Prospectuses regarding the offering programme 2005/2006 of CAPITAL BANK GRAWE Gruppe AG for the public offer of debt securities as performance linked notes, certificates and other derivative instruments in Austria and Germany (hereinafter referred as "Base Prospectus 05/06") and the Base Prospectus regarding the offering programme 2006/07 of CAPITAL BANK GRAWE Gruppe AG for the public offer of debt securities as performance linked notes, certificates and other derivative instruments in Austria and Germany (hereinafter referred as "Base Prospectus 06/07") and the Base Prospectus regarding the offering programme 2007/08 of CAPITAL BANK GRAWE Gruppe AG for the public offer of debt securities as performance linked notes, certificates and other derivative instruments in Austria and Germany (hereinafter referred as "Base Prospectus 07/08"), and the Base

3 3 Prospectus regarding the offering programme 2008/09 of CAPITAL BANK GRAWE Gruppe AG for the public offer of debt and derivative securities (hereinafter referred as "Base Prospectus 08/09"), and the Base Prospectus regarding the offering programme 2009/10 of CAPITAL BANK GRAWE Gruppe AG for the public offer of debt and derivative securities in Austria, Germany, the Czech Republic, Hungary, Slovakia and Slowenia (hereinafter referred as "Base Prospectus 09/10") as well as the the Base Prospectus regarding the Offering Programme 2010/11 of CAPITAL BANK GRAWE GRUPPE AG for the public offer of debt and derivative securities in Austria, Germany, the Czech Republic and Hungary (hereinafter referred as "Base Prospectus 10/11"). To allow securites issued under the afore mentioned prospectuses to be increased or offered under this Base Prospectus, the relevant sections of the Base Prospectus 05/06, the Base Prospectus 06/07, the Base Prospectus 07/08, the Base Prospectus 08/09 and the Base Prospectus 09/10 as well as of the Base Prospectus 10/11 shall be incorporated by reference into this Base Prospectus, as displayed in the section Documents incorporated by reference. This Base Prospectus as well as the Final Terms with respect to any Offer Securities issued under this Base Prospectus must not be published in any other country than Austria, in which there are or may be regulations for the registration, admission or other provisions regarding public offers of securities, except countries where the Issuer has requested the FMA to submit a certificate of approval to. In particular, this prospectus shall not be made publicly available or distributed in the United States, Great Britain, Canada and Japan. Any violation of these restrictions may result in the violation of US, British, Canadian or Japanese securities laws or the security regulations of other states. The Issuer has requested the FMA to provide the competent authorities of the Federal Republic of Germany, the Czech Republic and Hungary with a certificate of approval confirming that this Prospectus has been drawn up in accordance with Article 5.3 of the Prospectus Directive and relevant implementing legislation in Austria. Furthermore, the Offer Securities should only be offered or sold in compliance with applicable national and international laws. This Base Prospectus does not constitute an offer to sell or a solicitation of an offer to purchase the Offer Securities or other securities in countries, where it would be unlawful to make such an offer or solicitation. The publication or distribution of this Base Prospectus as well as the offer to sell or the sale of the Offer Securities may be unlawful in certain countries. CAPITAL BANK does not guarantee that this Base Prospectus may be lawfully distributed or that the Offer Securities may be legally offered in compliance with applicable registration or approval requirements, if any, or other restrictions in the respective country or under any applicable exemptions therefrom in such country. Furthermore, CAPITAL BANK does not assume any liability for any such distribution or offer. In particular, CAPITAL BANK has not approved of or prompted any actions, which could constitute an offer of the Offer Securities or a distribution of this Base Prospectus in countries, in which specific requirements have to be complied with. Therefore, the Offer Securities may neither directly nor indirectly be offered or sold nor shall this Base Prospectus or any advertising or offer material be distributed or published, unless all applicable laws in the respective countries are complied with. If prospective investors decide to invest in the Offer Securities, they should rely on their own assessment of the Company including any advantages and disadvantages that are inherent in connection with an investment in the Company. Any investment decision to buy, to subscribe or purchase the Offer Securities that are subject to this offering programme shall solely be based on this Base Prospectus together with all supplements thereto and the Final Terms, provided, however, that it has to be considered that any summary or description of legal provisions, corporate structures or contracts that are included in this Base Prospectus shall be read as information for the

4 4 prospective investors only but does not be deemed legal or tax advice as to the interpretation or enforceability of these provisions or relationships. No person including any distribution partner of the Issuer is or has been authorised to give any information or to make any representation other than those contained in this Base Prospectus, its supplements, if any, and the Final Terms. Should, however, any such information or representations be made, the Issuer does not assume any responsibility and liability in connection therewith. The Offer Securities of the Company have not been recommended by any securities commission or supervisory authority in any way. In case of doubt regarding the content or the meaning of any information contained in this Base Prospectus investors should consult a competent and authorized investment advisor. Neither the delivery of this Base Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the profitability, the business and the financial situation of the Company or its affiliates since the date of the publication of the Base Prospectus or since the publication of any supplement or the Final Terms or that any other information in connection with the Programme is still accurate after its publication or, if not published, after the date stated on any document, which includes the information. Neither this Base Prospectus nor any supplements, if any, nor the Final Terms nor any other information provided for in connection with this Base Prospectus or the Offer Securities purport to be (i) the basis of a credit rating assessment or (ii) a recommendation, invitation or solicitation of CAPITAL BANK to purchase or subscribe to the Offer Securities that are issued under this Base Prospectus. Investors have to base their investment decision regarding the Offer Securities on their own anaylsis of the profitability and financial situation and creditworthiness of CAPITAL BANK as well as the conditions of the Offer Securities including the chances and risks associated therewith. Neither CAPITAL BANK nor any third party has assumed any obligation to purchase the Offer Securities or to provide for or maintain liquidity in the market for the Offer Securities. There is no guarantee that a trading market will develop with respect to the Offer Securities issued under the Base Prospectus. This Base Prospectus shall not be copied or redistributed in whole or in part. Each investor approves of this restrictive use by receipt of this Base Prospectus. This Base Prospectus may include forward looking statements. Upon occurrence of known or unknown risks, uncertainties and other events it is possible that factual future events, the assets, financial, or profit situation, the development or the results of the Company may deviate from those statements that are expressly or implicitly included in this Base Prospectus. These include the following: competition with other banks, impact of current or future legislation, the ongoing capital needs of the Company, financing costs, changes of business expenses, uncertainties in connection with the business operation within and outside of Austria, material changes of applicable tax laws, riots, acts of god, wars, natural disasters and other factors mentioned in this Base Prospectus. Against the background of these and other general uncertainties investors are cautioned not to rely on these forward looking statements.

5 5 The assumptions, opinions, projections and assessments regarding forecasts made in this Base Prospectus are exclusively such of the management board of the Company. Assumptions, opinions, projections and assessments regarding forecasts may, in particular, be identified by the use of terms such as "expects", "believes", "assumes", "is of the opinion that", "to the best of our knowledge" and similar terms. They reflect the current view of the management board of the Company with respect to possible future events that are, however, uncertain and therefore subject to certain risks. A number of factors may cause that the actual events materially differ from the expected situation. Neither the Company nor the management board assumes any responsibility for the accuracy of the opinions stated in the Base Prospectus or the factual occurrence of projected developments. In addition to the definitions above, for the purposes of this prospectus, the following definitions shall apply: ADR, shall mean American Depository Receipt. GDR, shall mean Global Depository Receipt Company", "Issuer" and "CAPITAL BANK" shall mean CAPITAL BANK GRAWE GRUPPE AG. Exercise Period, shall mean the period fixed in the Final Terms during which an investor, in accordance with the relevant Final Terms, is entitled to exercise its option right with respect to American style Warrants issued under this Programme. Madoff Case, shall mean the deceptive incidents around several investment Fonds created and managed by the former Investor and Financier Bernard Madoff, who was arrested in December 2008 and meanwhile was convicted for 150 years of imprisonment. Noteholder shall mean any Investor in Notes under this Programme. Securities shall mean any Offer Securities issued under this programme that either constitute notes in the narrow sense (these are notes that have to be redeemed at least at their nominal value) or notes in the wider sense (these are all other notes, which hereinafter are also are referred to as "Performance Linked Notes") and Warrants. Offer Securities shall mean any Securities offered under this Programme Warrantholder" shall mean any holder of a warrant issued under this Programme. Warrants shall mean any Offer Securities issued under this Programme that are not Notes.

6 6 Documents incorporated by reference The Base Prospectus shall be read and construed in conjunction with the following documents which have been previously published or are published simultaneously with this Base Prospectus and shall be deemed to be incorporated by reference in, and form part of, this Base Prospectus: (a) the English version of the audited financial statements and the financial reports of CAPITAL BANK for the business year 2009; (b) the English version of the audited financial statements and the financial reports of CAPITAL BANK for the business year 2010 (c) the Annex 1 to the base prospectus for the Issuance Programme 2005/2006, dated 30 September 2005; (d) the Annex 1 to the base prospectus for the Issuance Programme 2006/2007, dated 30 September 2006; (e) the Annex 1 to the base prospectus for the Issuance Programme 2007/2008, dated 30 September 2007; (f) the Annex 1 to the base prospectus for the Issuance Programme 2008/2009, dated 27 October 2008; (g) the Annices 1 and 2 to the base prospectus for the Issuance Programme 2009/2010, dated 29 September (h) the Annices 1 and 2 to the base prospectus for the Issuance Programme 2010/2011, dated 22 September Any statement contained in any document incorporated by reference herein shall be deemed to be modified or superseded for the purpose of the Base Prospectus to the extent that such statement is inconsistent with a statement contained in this Base Prospectus. The notes to the financial statements as displayed in the incorporated documents mentioned under (a) above contain all information on notes to be published in accordance with the provisions of the Austrian Banking Act (Bankwesengesetz - BWG) and the Austrian Commercial Act (Unternehmensgesetzbuch - UGB). The Issuer herewith states that the non- incorporated parts are to the best of its knowledge, either not relevant for the investor or covered elsewhere in this Base Prospectus.

7 7 TABLE OF CONTENTS GENERAL INFORMATION AND SELLING AND OFFER RESTRICTIONS... 2 DOCUMENTS INCORPORATED BY REFERENCE... 6 I. SUMMARY OF THE PROGRAMME... 9 HUNGARIAN TRANSLATION OF THE SUMMARY OF THE BASE PROSPECTUS CZECH TRANSLATION OF THE SUMMARY OF THE BASE PROSPECTUS II. RISK FACTORS RISK FACTORS RELATING TO THE ISSUER RISK FACTORS RELATING TO THE OFFER SECURITIES General risks regarding all types of Offer Securities that are offered in connection with this Program Specific risks relating to specific types of Notes issued under this Programme Specific risks relating to warrants issued under this Programme III. DESCRIPTION OF CAPITAL BANK PERSONS RESPONSIBLE STATUTORY AUDITORS RISK FACTORS INFORMATION History and development of the Issuer BUSINESS OVERVIEW Principal activities ORGANISATIONAL STRUCTURE GRAWE-Group Dependency on other entities within the group TREND INFORMATION No material adverse change Other trend information PROFIT FORECAST OR ESTIMATES ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES Names, and business address of the members of the administrative, management and supervisory bodies as well as their function in the Issuer including their main activities which they carry outside of the Issuer where these are significant with respect to the Issuer Administrative management and supervisory bodies conflict of interests MAJOR SHAREHOLDER FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical financial information Financial statements Auditing of historical annual financial statements Age of the latest financial information Interim and other financial information Legal and arbitration proceedings Significant change in the Issuer's financial position MATERIAL CONTRACTS THIRD PARTY INFORMATION STATEMENT BY EXPERTS AND DECLARATION OF ANY INTEREST DOCUMENTS ON DISPLAY IV. DESCRIPTION OF THE OFFER SECURITIES PERSONS RESPONSIBLE RISK FACTORS KEY INFORMATION... 96

8 8 3.1 Interest of natural and legal persons involved in the issue/offer Reasons for the offer and use of proceeds (when different from making and/or hedging certain risks) INFORMATION CONCERNING THE SECURITIES TO BE OFFERED Information concerning the securities Information in relation to the underlying shares (and/or underlying) TERMS AND CONDITIONS OF THE OFFER Conditions, offer statistics, expected timetable and action required to apply for the offer Plan of distribution and allotment Pricing Placing and underwriting ADMISSION TO TRADING AND DEALING ARRANGEMENTS Contemplated admission to trading Regulated markets or equivalent markets on which securities of the same class of the securities to be offered or admitted to trading are already admitted to trading Name and address of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment ADDITIONAL INFORMATION Advisors Information audited and reviewed by statutory auditor in the Securities Note Statement or report attributed to a person as an expert Information sourced of a third party Post issuance Information Credit Rating V. LIST OF CROSS REFERENCES VI. ANNICES... 1

9 9 1. WARNING NOTICES I. SUMMARY OF THE PROGRAMME The following summary shall be read as an introduction to the Base Prospectus. The summary shall be read in conjunction with the Base Prospectus as a whole including the documents incorporated by reference, if any, as well as any supplements to the Base Prospectus and the respective Final Terms. Each investor shall base his/her investment decision regarding the Offer Securities described in this Base Prospectus on his/her consideration of the Base Prospectus as a whole, the supplements and the respective Final Terms that are published in connection with the issue of the Offer Securities. Civil liability may attach to those persons who tabled this summary and any translation thereof, and applied for its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus. If claims relating to the information contained in the Base Prospectus are brought before a court in the member state of the European Union, the investor acting as claimant may, under national legislation of the member state where the claim is brought, be required to bear the costs of translation of such Prospectus before legal proceedings are initiated. 2. THE ISSUER The issuer of the Offer Securities is CAPITAL BANK AG GRAWE GRUPPE AG, a joint stock corporation established under the laws of Austria. CAPITAL BANK is a credit institution in the meaning of the Austrian Banking Act (Bankwesengesetz - BWG) and mainly offers private banking and investment banking services to its clients. The geographical focus of its business is in Austria. CAPITAL BANK s share capital amounts to EUR 10,000,000. CAPITAL BANK is wholly owned by HYPO-BANK BURGENLAND Aktiengesellschaft. Grazer Wechselseitige Versicherungsaktiengesellschaft is the sole shareholder of HYPO-BANK BURGENLAND Aktiengesellschaft. The management board of the Issuer currently consists of Christian Jauk, MBA (Chairman of the Management Board) and Mag. Constantin Veyder-Malberg (member of the Management Board). The members of the supervisory board are currently Mag. Dr. Othmar Ederer (chairman of the supervisory board), Dr. Siegfried Grigg (deputy chairman of the supervisory board), DDipl.-Ing. Mag. Dr. Günther Puchtler, Dr. Franz Hörhager as well as Rudolf Laudon and Harald Greimel as members delegated by the works council to the supervisory board. KPMG Wirtschaftsprüfungsund Steuerberatungs GmbH was appointed as auditor for the business years 2009 and 2010.

10 10 3. THE OFFER SECURITIES The Offer Securities issued under this Base Prospectus shall constitute investments for investors. The proceeds from the issue of the Offer Securities, to the extent that they do not cover fees or other issue costs, are used in compliance with the purposes stated in the Final Terms by CAPITAL BANK and/or in fulfillment of general corporate purposes of CAPITAL BANK. The Offer Securities are notes in the narrow sense (these are Notes that have to be redeemed at least at their nominal value); or notes in the wider sense (these are all other Notes, which hereinafter are referred to as "Performance Linked Notes"); or Warrants. The specifics of the Offer Securities will be determined in the Final Terms. In cases of Warrants, the development of the investment will be totally linked to an underlying, and no interest will be paid. Interest calculation for other Offer Securities may, in particular, be as follows: recurring or non-recurring; fixed rate/floating rate; zero coupon/no interest. performance-linked (the interest or redemption of the principal depends on the performance of one or more underlyings including, in particular, the following underlyings (or combination of such underlyings): interest rates; Index or index basket; (Investment) funds or basket of (investment) funds; Hedge Funds bonds, basket of bonds or other equity or non-equity securities of other issuers or the Issuer; Credit risk or credit risk related events of third parties; Shares or basket of shares; Derivative financial instruments; Money market instruments; Other underlyings (such as commodities or inflation).

11 11 The repayment of principal may be fixed in advance or dependent on formulas and for example be related to the performance of the above mentioned underlyings. The contractual terms applicable to the Offer Securities issued under the debt Offering programme may be summarized as follows: Issuer... Depositary/Paying Agent/Calculation Agent... Method of issue... Currency... Maturities... Subscription ratio... Strike price... Issue price... CAPITAL BANK GRAWE Gruppe AG CAPITAL BANK GRAWE Gruppe AG or any other depositary/paying agent/calculation agent set forth in the Final Terms, e.g. an institution within the Banking Group, such as Hypo - Bank Burgenland AG. In any case, only an institution properly licensed und supervised according to the provisions of the Austrian Banking Act will be appointed as paying agent. The Offer Securities will be issued in series ("Series") under specific names either as permanent or one-time issues. Each Series shall have identical terms and conditions and the Offer Securities issued thereunder are fungible. The specific terms and conditions of each Series will be set out in the Final Terms. Unless otherwise provided in the Final Terms, the Offer Securities are denominated in Euro. Other currencies may be USD or GBP (not exhaustive enumeration). The Offer Securities will have a maturity as set forth in the Final Terms. In case of Warrants, maturity date means the date at which the investor is entitled to obtain the underlying in accordance with the conditions as set forth in the Final Terms. In case of Warrants, a subscription ratio will be fixed in the Final Terms stating the subscription ratio of Warrants into the underlying. In case of Warrants, a strike price will be fixed in the Final Terms at which the underlying can be obtained at the maturity date or during the Exercise Period. Offer Securities may be issued at par, above par, or at discount or at an issue price determined by reference to an underlying, to the extent provided for in the Final

12 12 Terms also with another discount or premium. Denomination... Form... Representation of Offer Securities... Issue... Transferability... Status... Collateral... Interest period and interest amount... Redemption and Redemption amount... CAPITAL BANK contemplates to issue Offer Securities under the Programme in small denominations as well as in high denominations of up to an amount of EUR 50, or above per Note. The Offer Securities will be issued in bearer form. Unless the Final Terms provide otherwise, the Offer Securities of each Series shall be represented by a global certificate (Global Note or Global Warrant, depending on the type of security issued); no individual certificates shall be issued to any holder of the Offer Securities at any time. Unless stated otherwise in the Final Terms, the global certificate(s) representing the Offer Securities, if any, shall be deposited before or on the date of the issue of each Series with the depositary. The Offer Securities are freely transferable. The Offer Securities constitute direct, unconditional, and unsubordinated obligations of the Issuer and rank pari passu among themselvesand with all other direct, unconditional, unsecured and unsubordinated obligations of the Issuer The Offer Securities are not secured, unless the Final Terms expressly provide otherwise. The length of interest periods for the Offer Securities as well as the applicable interest rates (no interest; fixed interest; floating interest; derivative interest) and its methods of calculation as well as the underlyings, if any, for the interest calculation may differ or be identical among the respective Series. The Offer Securities may include a combination of interest rates, a maximum or minimum interest rate or both of them. All this information will be included in the Final Terms. Redemption and the redemption amount are determined in the Final Terms, if applicable. This also applies to

13 13 minimum redemption amounts, if applicable. Settlement... Early redemption... Governing law/place of jurisdiction... Limitation period... The settlement shall be made by Österreichische Kontrollbank Aktiengesellschaft or by CAPITAL BANK, unless the Final Terms provide otherwise. The Final Terms will state whether Notes (but not Warrants) may be redeemed prior to the stated maturity. Except as provided in the Final Terms, the Noteholders shall not have the right to redeem the Offer Securities prior to their stated maturity. Unless the Final Terms provide otherwise, (i) all Offer Securities shall be governed and construed in accordance with Austrian law (without reference to the provisions of the Austrian conflicts of law provisions) and (ii) the competent courts of Austria in Graz are to have jurisdiction to settle any disputes that may arise out of or in connection with any Offer Securities, unless the investor is a consumer in the meaning of the Austrian Consumer Protection Act as amended (Konsumentenschutzgesetz KSchG). Any disputes with consumers that may arise out of or in connection with any Offer Securities shall be settled by the competent local court where the consumer has his permanent residence or, at the consumer's sole discretion, by the competent courts of Austria in Graz. The limitation period for the redemption of principal shall be 10 years

14 14 4. RISK FACTORS The following risk factors are from the Issuer's point of view the most material risk factors relating to the Issuer (these risks are set out in detail under section II.1 "Risk Factors relating to the Issuer"): Competition risk - Competition is increasingly high in the Austrian and international banking sector Risk of dependency on provision fees The decrease of provision fees in connection with the banking business may negatively affect the business, financial and profit situation of the Issuer Risk relating to the expansion of business activities Failure of the Issuer to expand its private banking business may negatively affect the business, financial and profit situation of the Issuer Risk of failure to grow or at least to defend the market share - The business of the Issuer may not develop at all or may even decline and this may negatively affect the financial performance of the Issuer Risk of loss of market acceptance in connection with changes in products, services offered and business activities CAPITAL BANK S changes in products and services may result in lower market acceptance and therefore may have significant negative effects on sales and profit Risk of break down of the Issuer's risk management - Break down of the risk management may result in a downturn of the sales and the profit and in a reputational damage of the Issuer Credit default and investment risk Investors are subject to the credit risk of the Issuer's customers and counterparties Refinancing risk Costs of refinancing may increase or refinancing may even become impossible and this may have a negative effect on the business, financial and profit situtation of CAPITAL BANK Risk of dependency on qualified personnel and risk to lose such qualified personnel - The loss of one or more members of the management or key employees may have a material adverse effect on the business, financial and profit situation of CAPITAL BANK. Market crisis risk The continuing crisis of the financial markets may cause an increase of the Issuer's credit risk, the refinancing risk, the credit default and

15 15 investment risk resulting in a delay in or inability by the Issuer to make scheduled interest or principal payments to the investors Risk of financial crime Financial crimes like the Madoff Case may result in significant losses in the Issuers profits and reputation and therefore result in significant declines in CAPITAL BANKS results of business operations IT risk Break down of IT systems may result in financial losses of the Issuer Regulatory risk The compliance with and the implementation of Basel III capital requirements and other new regulatory policies may be costly and may have a negative effect on the Issuer's financial results Market risk Market fluctuations could impair the value of the Issuer's assets and adversely affect its financial position and results of operations Risk of malpractice - If malpractice is successfully claimed against the Issuer, this may adversely affect the Issuer's business, financial and profit situation Operational risk relating specifically to the platform business Operational risk in connection with recent reorganisation of internal departments within the banking group Risk of potential conflicts of members of the administrative, managing and supervisory bodies of the Issuer Risk in connection with leveraged finance activities of the Issuer The following risk factors are from the Issuer's point of view the most material risk factors relating to the Offer Securities (these risks are set out in detail under section II.2 "Risk Factors relating to the Offer Securities"): Some of the Offer Securities offered under this Base Prospectus may be linked to hedge funds or indices which represent the performance of such hedge funds. Investmestment in such Offer Securities is extremely risky General risks regarding all types of Offer Securities issued under this Programme: Market risk The change of general market conditions in or outside of Austria may negatively affect the value of the Offer Securities

16 16 Interest rate risk Interest rate levels on financial and capital markets may fluctuate on a daily basis and may negatively impact the value of interest bearing Offer Securities Credit risk (of the Issuer) Risk that the Issuer fails to make interest and/or redemption payments Credit spread risk Risk that the Issuer's credit spread increases and the value of the Offer Securities decreases respectively Reinvestment risk Risk that the general market interest rate falls below the interest rate of the Note during its term Risk of early redemption by Issuer Early redemption of the Offer Securities by the Issuer may result in lower than expected yields of the Investors or even in a total loss of their invested capital Cash flow risk The actual cash flows under the Offer Securities, the (re)payment of which is linked to an underlying, may differ from the cash flows expected by investors Risk relating to the rating of the Offer Securities Suspension, downgrading or termination of the rating of the Offer Securities may have a material adverse effect on the price of the Offer Securities Option price risk - Structured Offer Securities may be linked to underlying funds which may buy options and bear the option price risk; such option price risk may adversely affect the profits from the Offer Securities. Currency risk Lower yields or losses may be derived from Offer Securities denominated in foreign currencies because of the exchange rate risk Inflation risk Inflation may result in a lower or even negative yield Liquidity risk Investors might not be able to sell the Offer Securities before maturity if no active liquid trading market develops Risk relating to trading activities by the Issuer The trade in Offer Securities by the Issuer or the issue of additional Offer Securities may adversely affect the market price of the Offer Securities Risk of sale prior to final maturity by investors In case the investor sells Offer Securities prior to maturity he might not receive the redemption amount but only the (lower) market price

17 17 Conflicts of interest Conflicts of interest and hedging transactions of the Issuer may negatively influence the price of the Offer Securities Market price risk Historic performance of Structured Offer Securities never guarantees a good future performance, which depends on the performance of underlyings Risk of debt financing Purchase of Offer Securities on credit increases the investor s risk significantly because an investor might suffer a total loss of his investment and, additionally, has to repay the loan Risk relating to transaction cost/charges Transaction costs/charges may significantly reduce or eliminate the yield from the Offer Securities Risk with respect to clearing systems Investors bear the risks that the clearing systems function properly Risk relating to inconceivable and irrational factors Such factors may negatively influence the value of Offer Securities Taxation risk The tax impact of an investment in the Offer Securities shall be carefully considered Changes of law Changes in applicable laws, regulations or regulatory policies may have an adverse effect on the Issuer, the Offer Securities and the investors Risk of suspension, interruption or termination of trading in the Offer Securities or the underlying There is a risk that the trading in the Offer Securities or underlyings will be suspended, interrupted or terminated, which may result in a partial or total loss of the investment made by the Investors in the Offer Securities Risk of reduction of the general limitation period

18 18 Specific risks relating to the specific types of Notes issued under this Programme: Risks of Offer Securities with guaranteed redemption amount or guaranteed minimum interest rates Risks of Structured Offer Securities, i.e. Offer Securities which are linked to an underlying (or combinations of such underlyings) such as - interest rates; - Index or index basket; - (Investment) funds or basket of (investment) funds; - Hedge Funds - bonds, basket of bonds or other equity or non-equity securities of other issuers or the Issuer; - Credit risk or credit risk related events of third parties; - Shares or basket of shares; - Derivative financial instruments; - Money market instruments; - Other underlyings (such as commodities or inflation). Notes with leverage effect in particular by debt financing Currency linked notes and notes issued in foreign currency Notes with other country risk Appointment of trustee Risks in connection with Secured Structured Notes Specific risks relating to warrants issued under this Programme No regular returns Enhanced dependency on the underlying Risk of limited terms of warrants Disproportionately high participation in the development of the underlying (leverage effect) Offer Securities are also subject to tax and legal risks, in particular the tax and legal framework for the Offer Securities may change in the future to the disadvantage of the Investors.

19 19 Any potential investor shall only make a decision to invest in the Offer Securities after carefully considering his/her personal financial siutation and his/her investment objectives and to consult with his/her financial tax and legal advisors as to whether the Offer Securities are a suitable investment in light of their personal situation. If one or more of the risks related to the Issuer and the Offer Securities realise(s), this may lead to material and significant price decline in the Offer Securities or in extremis to a total loss of the interest and of the investment made by the investor. 5. DOCUMENTS ON DISPLAY The articles of association of CAPITAL BANK, the audited financial statements for the business years 2009 and 2010, as well as this Base Prospectus including all supplements, which will be prepared pursuant to section 6 of the Austrian Capital Markets Act by CAPITAL BANK, the Base Prospectuses 05/06, 06/07, 07/08, 08/09, 09/10 and 10/11 as well as the Final Terms regarding the publicly offered Offer Securities are made available at the corporate seat of CAPITAL BANK during the validity period of the Base Prospectus, and can be downloaded from the Homepage of the Issuer at URL:

20 20 The following translation of the original summary is a separate document attached to the Base Prospectus. It does not form part of the Base Prospectus itself and has not been approved by the FMA. Further, the FMA did not review its consistency with the original summary. Die folgende Übersetzung der Originalzusammenfassung ist ein separates Dokument und bildet einen Anhang zu diesem Basisprospekt. Sie ist selbst kein Teil dieses Basisprospekts und wurde nicht von der FMA genehmigt. Auch die Übereinstimmung mit der Originalzusammenfassung wurde nicht durch die FMA geprüft. I. ZUSAMMENFASSUNG 1. WICHTIGE HINWEISE Diese Zusammenfassung sollte als Einleitung zum Basisprospekt verstanden werden. Die Zusammenfassung ist im Zusammenhang mit dem gesamten Inhalt des Basisprospektes und in den gegebenenfalls durch Verweis einbezogenen Dokumenten sowie etwaigen Nachträgen zum Basisprospekt und den jeweiligen Endgültigen Angebotsbedingungen zu lesen. Jeder Anleger sollte jede Entscheidung zur Anlage in die in diesem Basisprospekt genannten Wertpapiere auf die Prüfung des gesamten Basisprospekts samt Nachträgen und den jeweiligen Endgültigen Angebotsbedingungen, die im Zusammenhang mit der Begebung der Wertpapiere veröffentlicht werden, stützen. Diejenigen Personen, die diese Zusammenfassung (einschließlich einer Übersetzung davon) vorgelegt und deren Meldung beantragt haben, können haftbar gemacht werden, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit den anderen Teilen dieses Basisprospekts gelesen wird. Für den Fall, dass vor einem Gericht Ansprüche aufgrund der in diesem Basisprospekt enthaltenen Informationen geltend gemacht werden, könnte ein als Kläger auftretender Anleger in Anwendung der einzelstaatlichen Rechtsvorschriften der Mitgliedstaaten der Europäischen Union die Kosten für die Übersetzung des Basisprospekts vor Prozessbeginn zu tragen haben. 2. DIE EMITTENTIN Emittentin der angebotenen Wertpapiere ist die CAPITAL BANK GRAWE GRUPPE AG, eine Aktiengesellschaft nach österreichischem Recht. Die CAPITAL BANK ist ein Kreditinstitut im Sinne des österreichischen Bankwesengesetzes und hauptsächlich als Privatbank und Investmentbank tätig. Der geographische Schwerpunkt der Geschäftstätigkeit liegt in Österreich.

21 21 Das satzungsmäßige Grundkapital der CAPITAL BANK beträgt 10, ,--. Die CAPITAL BANK gehört zu 100 % der HYPO-BANK BURGENLAND Aktiengesellschaft. Die Grazer Wechselseitige Versicherungsaktiengesellschaft ist alleinige Aktionärin der HYPO-BANK BURGENLAND Aktiengesellschaft. Derzeit wird der Vorstand der CAPITAL BANK von Christian Jauk, MBA (Vorsitzender des Vorstands) und Mag. Constantin Veyder-Malberg (Mitglied des Vorstands) gebildet. Die Aufsichtsratsmitglieder der CAPITAL BANK sind derzeit Mag. Dr. Othmar Ederer (Vorsitzender des Aufsichtsrates), Dr. Siegfried Grigg (Stellvertretender Vorsitzender des Aufsichtsrates), DDIng. Mag. Dr. Günther Puchtler, Dr. Franz Hörhager sowie Rudolf Laudon und Harald Greimel als die vom Betriebsrat entsandten Aufsichtsratsmitglieder. Abschlussprüfer der CAPITAL BANK für die Geschäftsjahre 2009 und 2010 war die KPMG Wirtschaftsprüfungs- und Steuerberatungs GmbH. 3. DIE ANGEBOTENEN WERTPAPIERE Die im Rahmen dieses Basisprospekts begebenen angebotenen Wertpapiere stellen ein Veranlagungsinstrument für Investoren dar. Die aus der Begebung der angebotenen Wertpapiere der CAPITAL BANK zufließenden Mittel werden, soweit diese nicht Spesen oder sonstige Emissionskosten abdecken, von der CAPITAL BANK entsprechend den in den Endgültigen Angebotsbedingungen gemachten Angaben im Interesse der Investoren investiert und/oder zur Erfüllung der satzungsgemäßen Aufgaben der CAPITAL BANK verwendet. Die Angebotenen Wertpapiere sind Schuldverschreibungen im engeren Sinn (das sind Schuldverschreibungen, die eine Rückzahlung mindestens zum Nennbetrag vorsehen); oder Schuldverschreibungen im weiteren Sinn (das sind alle anderen Schuldverschreibungen, auch "Performance Linked Notes" genannt), oder Optionsscheine. Die konkrete Ausgestaltung der angebotenen Wertpapiere wird in den Endgültigen Angebotsbedingungen festgelegt. Im Falle von Optionsscheinen wird die Wertentwicklung vollständig an einen Basiswert gekoppelt, und es wird keine Verzinsung gezahlt. Die Verzinsung bei anderen angebotenen Wertpapieren kann insbesondere wie folgt ausgestaltet sein: Periodisch oder einmalig Festverzinst/variabel verzinst

22 22 Nullkoupon/Unverzinst Basiswert-bezogen (die Verzinsung oder Rückzahlung von Kapital hängt von der Entwicklung eines oder mehrerer Basiswerte ab, wobei insbesondere folgende Basiswerte (oder Kombinationen solcher Basiswerte) in Frage kommen: - Zinssätze - Index oder Indexkorb - (Investment)Funds oder Korb aus (Investment) Funds - Hedge Funds - Schuldverschreibungen, Schuldverschreibungskörbe oder sonstige Dividenden- oder Nichtdividendenwerte anderer Emittenten oder der Emittentin selbst - Kreditrisiken von oder kreditrisikobezogene Ereignisse bei Drittschuldnern - Aktien oder Aktienkorb - Derivative Finanzinstrumente - Geldmarktinstrumente - Andere Basiswerte wie beispielsweise Waren ("Commodities") oder Inflation Auch die Rückzahlung auf das Kapital kann von vornherein fixiert oder in Abhängigkeit von Formeln und bspw durch Anknüpfung an die oben genannten Basiswerte bestimmt sein. Die auf die im Rahmen des Angebotsprogramms begebenen angebotenen Wertpapiere anwendbaren Bestimmungen lassen sich wie folgt zusammenfassen: Emittentin... CAPITAL BANK GRAWE GRUPPE AG. Depotbank/Zahlstelle/ CAPITAL BANK GRAWE GRUPPE AG oder eine andere Berechnungsstelle... in den Endgültigen Angebotsbedingungen angegebene Depotbank/Zahlstelle/Berechnungsstelle. Zum Beispiel ein Institut innerhalb der Bankengruppe, wie die Hypo Bank Burgenland AG. In jeden Fall muss das als Zahlstelle nominierte Institut nach den Bestimmungen des österreichischen Bankwesengesetzes konzessioniert und beaufsichtigt sein. Begebungsmethode... Die angebotenen Wertpapiere werden in Serien ( Serien") unter bestimmten Bezeichnungen entweder in Form einer Dauer- oder Einmalemission begeben. Jede Serie hat inhaltlich gleichlautende Emissionsbedingungen und die darunter emittierten angebotenen Wertpapiere sind untereinander austauschbar. Die speziellen Bedingungen der einzelnen Serien werden jeweils in den Endgültigen Angebotsbedingungen festgesetzt werden.

23 23 Währung... Falls nicht in den Endgültigen Angebotsbedingungen anderes bestimmt wird, werden die angebotenen Wertpapiere in Euro begeben. Andere Währungen können USD oder GBP sein (keine taxative Aufzählung). Laufzeit... Schuldverschreibungen werden eine Laufzeit entsprechend den Endgültigen Angebotsbedingungen haben. Bei Optionsscheinen bezeichnet der Endfälligkeitstag den Tag, an dem der Basiswert anhand der Bestimmungen der Endgültigen Angebotsbedingungen bezogen werden kann. Bezugsverhältnis... Im Falle von Optionsscheinen wird in den Endgültigen Angebotsbedingungen ein Bezugsverhältnis von Optionsscheinen zu dem Basiswert festgelegt. Ausübungspreis... Im Falle von Optionsscheinen wird in den Endgültigen Angebotsbedingungen ein Ausübungspreis festgelegt zu dem der Basiswert am Endfälligkeitstag oder während des Ausübungszeitraums bezogen werden kann. Ausgabepreis... Angebotenen Wertpapiere werden zu ihrem Nominalbetrag, über pari, unter pari oder zu einem Ausgabepreis, der in Abhängigkeit von einem Basiswert festgelegt wird, soweit in den Endgültigen Angebotsbedingungen vorgesehen auch mit einem sonstigen Abschlag oder Aufschlag begeben. Stückelung... Die CAPITAL BANK beabsichtigt, die angebotenen Wertpapiere sowohl in kleinen Stückelungen als auch solche in größerer Stückelung auch von bis zu EUR ,-- oder darüber je Schuldverschreibung im Rahmen des Angebotsprogramms zu begeben. Form... Die angebotenen Wertpapiere werden als Inhaberpapiere ausgestaltet. Verbriefung... Soweit nicht in den Endgültigen Angebotsbedingungen Abweichendes vorgesehen ist, werden die angebotenen Wertpapiere einer jeden Serie in einer Sammelurkunde verbrieft; der Anspruch auf Einzelverbriefung ist ausgeschlossen. Begebung... Soweit in den Endgültigen Angebotsbedingungen nicht Abweichendes festgelegt wird, wird vor oder am Tag der Begebung jeder Serie die jeweilige(n) Sammelurkunde(n), soweit solche vorliegen, welche die angebotenen Wertpapiere verbrieft/verbriefen, bei der Depotbank hinterlegt. Übertragbarkeit... Die angebotenen Wertpapiere sind frei übertragbar. Rang... Die angebotenen Wertpapiere begründen direkte, unbedingte und nicht-nachrangige Verbindlichkeiten der Emittentin und stehen im selben Rang mit allen anderen direkten, unbedingten und nicht-nachrangigen Verbindlichkeiten der Emittentin. Besicherung... Soweit in den Endgültigen Angebotsbedingungen nicht Abweichendes festgelegt wird, sind die angebotenen Wertpapiere nicht besichert.

24 24 Zinsperiode und Die Länge der Zinszeiträume für angebotenen Wertpapiere Zinsbetrag... sowie die allenfalls anwendbaren Zinssätze (keine Verzinsung; festverzinst; variabel verzinst; derivative Verzinsung) und Berechnungsmethoden sowie allfälligen Basiswerte für die Zinsberechnung können zwischen einzelnen Serien variieren oder ident sein. Die angebotenen Wertpapiere können auch Verzinsungskombinationen, einen Höchstzins- oder einen Mindestzinssatz, oder beides aufweisen. All diese Informationen werden in den Endgültigen Angebotsbedingungen enthalten sein. Rückzahlung und Rückzahlung und Rückzahlungsbeträge sind in den Rückzahlungsbetrag... Endgültigen Angebotsbedingungen festgelegt. Dies gilt auch für allfällige Mindestrückzahlungsbeträge. Settlement... Das Settlement der angebotenen Wertpapiere erfolgt, soweit in den Endgültigen Angebotsbedingungen nicht Abweichendes festgelegt wird, über die Oesterreichische Kontrollbank Aktiengesellschaft oder über die CAPITAL BANK. Kündigung... Die Endgültigen Angebotsbedingungen können sowohl ordentliche als auch außerordentliche Kündigungsrechte der Emittentin vorsehen, ausser bei Optionsscheinen. Die Angebotenen Wertpapiere können während der Laufzeit nicht durch die Inhaber gekündigt werden, es sei denn die Endgültige Angebotsbedingungen sehen ein solches Kündigungsrecht vor. Rechtsordnung; Soweit in den Endgültigen Angebotsbedingungen nicht Gerichtsstand... Abweichendes festgelegt wird, ist (i) für sämtliche Rechtsverhältnisse im Zusammenhang mit den angebotenen Wertpapieren österreichisches Recht mit der Ausnahme der Verweisungsnorm des internationalen Privatrechts anwendbar und (ii) für alle Streitigkeiten aus oder in Zusammenhang mit den angebotenen Wertpapieren das sachlich zuständige Gericht am Sitz der Emittentin in Graz zuständig, es sei denn, der Investor ist ein Verbraucher im Sinne des österreichischen Kosumentenschutzgesetzes (KSchG). Für alle Streitigkeiten mit Verbrauchern in Zusammenhang mit den angebotenen Wertpapieren ist das sachlich zuständige Gericht des Ortes zuständig, an dem der Verbraucher seinen Wohnsitz hat, oder, nach Wahl des Verbrauchers, das sachlich zuständige Gericht in Graz. Verjährung... Die Verjährungsfrist für die Rückzahlung des Kapitals beträgt 10 Jahre