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Two years ago, Raiffeisen looked in good shape for a bank with most of its operations in central and eastern Europe. Under the charismatic leadership of Herbert Stepic, the man who transformed the bank from an Austrian also-ran into a regional giant with operations in 15 ex-communist countries, it had weathered the financial and eurozone crises without loss, was posting healthy profits and paying handsome dividends, and had just doubled its exposure to CEE’s most promising market, Poland, by the acquisition of Polbank EFG.
Those days now seem very far away. Stepic has gone, replaced by his mild-mannered deputy Karl Sevelda, after being forced to resign in May 2013 over questions about property dealings in Asia. (Stepic has not left the building; he is still firmly ensconced in a magnificent top-floor office suite surrounded by his famous collection of African art.)
The banking empire Stepic built is also under threat. In February, at the same time as announcing Raiffeisen’s first ever full-year loss, Sevelda also revealed plans to slash international exposure in a bid to boost the bank’s eroding capital base. These include cutting exposure to the rapidly deteriorating Russian market, abandoning some of Raiffeisen’s further-flung outposts in the US and Asia and, most importantly, the sale of all of the bank’s newly merged operations in Poland.
