Pre-Stabilisation notice

    11th January 2017

    Not for distribution, directly or indirectly, in or into the United States or
    any jurisdiction in which such distribution would be unlawful.

                                     BAWAG P.S.K.                                  

                      € 500mn Public Sector Covered Bond due 2027                  

    Pre-Stabilisation Notice

    Commerzbank AG (contact: Christian Klocke; telephone: +4969 13643420) hereby
    announces, as Stabilisation Coordinator, that the Stabilising Managers named
    below may stabilise the offer of the following securities in accordance with
    Commission Delegated Regulation (EU) 2016/1052 under the Market Abuse
    Regulation (EU Regulation 596/2014).

    The security to be stabilised:                                                
                                                                                  
    Issuer:                            BAWAG P.S.K. Bank für Arbeit und Wirtschaft
                                       und Österreichische Postsparkasse          
                                       Aktiengesellschaft                         
                                                                                  
    Guarantor (if any):                none                                       
                                                                                  
    Aggregate nominal amount:          € 500,000,000 (no grow)                    
                                                                                  
    Description:                       Public Sector Covered Bond                 
                                                                                  
    Offer price:                       tbc                                        
                                                                                  
    Other offer terms:                 settlement 18th Jan; maturity 18th Jan     
                                       2027, listing Luxembourg, denoms 100k/100k 
                                                                                  
    Stabilisation:                                                                
                                                                                  
    Coordinating stabilising Manager:  Commerzbank AG                             
    Stabilising Manager(s):            Goldman Sachs                              
                                       JP Morgan                                  
                                       Morgan Stanley                             
                                       UBS                                        
                                                                                  
    Stabilisation period expected to   11th January 2017                          
    start on:                                                                     
                                                                                  
    Stabilisation period expected to   no later than 30 days after the proposed   
    end on:                            issue date of the securities               
                                                                                  
    Existence, maximum size and        The Stabilising Manager(s) may over-allot  
    conditions of use of               the securities to the extent permitted in  
    over-allotment facility.           accordance with applicable law.            
                                                                                  
    Stabilisation trading venue:       Regulated market of the Luxembourg Stock   
                                       Exchange                                   

    In connection with the offer of the above securities, the Stabilising Manager
    (s) may over-allot the securities or effect transactions with a view to
    supporting the market price of the securities during the stabilisation period
    at a level higher than that which might otherwise prevail. However,
    stabilisation may not necessarily occur and and any stabilisation action, if
    begun, may cease at any time Any stabilisation action or over-allotment shall
    be conducted in accordance with all applicable laws and rules.

    This announcement is for information purposes only and does not constitute an
    invitation or offer to underwrite, subscribe for or otherwise acquire or
    dispose of any securities of the Issuer in any jurisdiction.

    This announcement is not for distribution, directly or indirectly, in or into
    the United States or any other jurisdiction in which such distribution would be
    unlawful.

    END