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The suggestion, even three years ago, that Austria’s fourth biggest bank might help prop up UniCredit – let alone Deutsche Bank – would have seemed ridiculous. Back then memories were still fresh of the bank run and bail-out under Bawag PSK’s former ownership.
In the years following the crisis, US private equity firms Cerberus and later GoldenTree helped recapitalize Bawag after acquiring it in 2007 from the Austrian Trade Union Federation. By 2012 the new management led by CEO Byron Haynes had done a good job of stabilizing and cleaning up the institution. Its survival was less in doubt, but it still seemed a long way from being able to make acquisitions and certainly not ones that could see it double in size, or more.
In the past three years, however, Bawag’s profit has more than quadrupled and its capital ratios have more than doubled. It is now the most profitable and best-capitalized bank in Austria and one of the best in the eurozone. The rapid pace of change is set to continue, Haynes tells Euromoney in Bawag’s historic Vienna headquarters. “We’re in exciting times for the bank,” he enthuses.
