BAWAG
From Wikipedia, the free encyclopedia
| Bank für Arbeit und Wirtschaft AG | |
|---|---|
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| Type | Private |
| Founded | 1922 |
| Headquarters | Vienna, Austria |
| Key people | Ewald Nowotny, Chairman of Management Board |
| Industry | Finance and Insurance |
| Products | Commercial banking, Investment banking, Private banking, Asset management |
| Revenue | € 56,271 mn (2004, as part of the merged BAWAG P.S.K.) |
| Employees | ~6.280 (2004, as part of BAWAG P.S.K.) |
| Website | BAWAG and PSK website |
BAWAG (German language: Bank für Arbeit und Wirtschaft) is a bank in Austria. On October 1, 2005, it merged with the separate Österreichische Postsparkasse (P.S.K.) to form the "Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG", short the BAWAG P.S.K..
[edit] History
BAWAG was founded in 1922 by the Austrian Chancellor Dr. Karl Renner, to extend favourable terms of credit to ordinary people, as the Arbeiterbank (Austrian Worker's Bank). Since the bank had close ties to the Social Democratic Party of Austria (SPÖ) and labour unions, it was forced to close in 1934 by the Austro-fascist government of Chancellor Engelbert Dollfuß. It resumed its operations after the end of World War II in 1947.
In 1963, it took the name of Bank für Arbeit und Wirtschaft AG (BAWAG, translatable as "Bank for Labour and Business"). The bank continued to have close relations to social democratic party SPÖ and the unions. The Austrian Trade Union Federation (ÖGB) retained 70% of the shares, the other 30% were held by the Konsum retail cooperative chain.
Starting in the 1970's, the bank actively used its finances to sponsor the promotion of Austrian contemporary art and culture. The BAWAG Foundation was established in 1974 with the goal of making art as accessible as possible to all people.[1] In 1979, parliament amended the Austrian Banking Act (Kreditwesengesetz or KWG), which now allowed the operation of branch offices. The BAWAG experienced rapid expansion throughout Austria, from an existing network of 26 offices to 120 by 1982.
The shareholder Konsum went bankrupt in 1995, which sent shockwaves through the political landscape in Austria, especially for the social democrats. The Bayerische Landesbank bought the shares and increased them to 46%.
In 2000, BAWAG successfully took over a majority of shares of the Österreichische Postsparkasse (P.S.K.) bank and bought 74.82% of the shares from the government. In November 2003, the remaining 25.18% were bought up as well. The merger, which was not finalised until 2005, created the country's third-largest bank group with a balance sheet total of nearly 45 billion euros, 5000 employees, some 2000 outlets and over one million private customers (2000). The new BAWAG/P.S.K. Group now had the largest centrally managed sales network in Austria.[2]
With the combined assets, the new group BAWAG/P.S.K. experienced further growth. The piano manufacturer Bösendorfer was bought from the American company Kimball International in 2001. Since the fall of the Iron Curtain and the prospect of an accession of Central- and East European countries to the EU, new market opportunities open up. In 2002, the Slovakian bank Istrobanka is bought, a year later the Czech bank Interbanka. Both equities are owned 100% by the BAWAG. The new partners opened up opportunities to expand in retail banking and open new branches throughout Europe. In 2004, BAWAG acquired 100% of the shares of Dresdner Bank CZ, integrating it into the Interbanka, now renamed as BAWAG Bank CZ.
The Bayerische Landesbank sold its 46% share in 2004 to the other shareholder, the Austrian Trade Union Federation (ÖGB). With that deal, the ÖGB became sole owner of the BAWAG. Since the Refco scandal in October 2005, which involved bad loans in the sum of 425 million euros, the bank almost defaulted on its obligations and had to be bailed out by the conservative government of Wolfgang Schüssel. This has cast doubts about the future of links between the socialist-led unions and the bank.
In December 2006, US-based Cerberus Capital Management bought the bank for €3.2 billion.
