BA eyes HGAA takeover

Bank Austria (BA) chief Willibald Cernko has revealed interest in Hypo Group Alpe Adria (HGAA).The banker said today (Weds) BA was interested in acquiring HGAA’s Austrian business. He explained: “We are talking about 60,000 customers here. It would be highly ignorant not to consider this.”Cernko stressed there were “many requirements” before a possible takeover. The BA head stressed his institute was only interested in HGAA’s operations in Austria. This announcement suggests that BA – one of Austria’s leading banks – has no intentions in HGAA’s branches in Southeast Europe. HGAA is one of the main players of the region’s financial sector.HGAA was nationalised in 2009 due to soaring losses the bank made, allegedly due to lax lending policies in Croatia and other south-eastern European countries. Munich-based BayernLB (Bayerische Landesbank) sustained an overall loss of 3.7 billion Euros after taking over HGAA in 2007.Austrian People’s Party (ÖVP) Finance Minister Josef Pröll justified the decision to nationalise HGAA by arguing the institute was “system-relevant” and a collapse would have had dramatic effects on the Austrian economy.Dozens of businesspeople across Europe may face charges over occurrences linked with HGAA as investigations of prosecutors in Vienna, Klagenfurt and Munich continue.Cernko also said today he expected BA will be forced to fork out an additional 150 million Euros before tax this year due to the new bank tax the Austrian government – which is formed by the Social Democrats (SPÖ) and the ÖVP – agreed upon.The coalition said it hoped for an extra 500 million Euros of tax revenue per year from the new levy which has been harshly criticised by Cernko, Raiffeisenzentralbank (RZB) head Walter Rothensteiner and other CEOs.Cernko said BA may have to pay 400 million Euros in taxes and various charges in Austria this year.The banker said BA had 62,524 employees at the end of last year, down from 63,218 staff it had at the same time in 2009. Only 11,000 employees are working for BA in Austria as the other staff are managing its operations in Central and Eastern Europe (CEE). BA handles the activities of Italian financial market giant UniCredit in the region.Cernko said BA’s Kazakh affiliate ATF was the only loss-making part of the UniCredit network in CEE. He also announced that the bank saw strong growth especially in Turkey and Russia last year.The pre-tax profits of BA’s CEE section soared by 16 per cent to 1.06 billion Euros last year, according to Cernko.