BA job loss concerns as Profumo quits
A Bank Austria (BA) official has revealed he was “alarmed” by the retirement of UniCredit boss Alessandro Profumo.Profumo, who announced yesterday (Tues) he would step down, has been heavily criticised for failing to prevent Libyan state bodies increase their stake in the Italian institute to 7.5 per cent.The Italian banker guaranteed UniCredits subsidiary BA it would stay in charge of the institutes operations in Central and Eastern Europe (CEE). Contracts say that UniCredits activities in the area must be handled from Vienna until 2016.Now the head of the BA works council has revealed he is worried the Austrian bank could lose its privileged status.BA employees representative Wolfgang Heinzl said today he was convinced Profumos successor will stick to previously made agreements, but added: “Were all alarmed.”Heinzl admitted he feared redundancies if UniCredit Italys biggest bank opts for an “external solution” as new chief and not someone who has already been a member of the executive board.Heinzl said: “The Austrian operations became more important when they were linked to the CEE business.”BA has around 8,000 employees. It is Austrias third-biggest bank after Erste Bank and Raiffeisenzentralbank (RZB).Profumo is reportedly set to receive 40 million Euros in compensation. Supervisory board chief Dieter Rampl will provisionally head the Italian institute until a new leader is appointed.Profumo, who was at the helm in 1997, turned UniCredit into one of the biggest banks in Europe. The institute did well in the European Unions (EU) recent stress test for banks.Referring to pressure by the supervisory board and executive board members, a bitter Profumo said last night: “Ive been sent away after 15 years of hard work.”BA, which is headed by Willibald Cernko since October 2009, suffered a 10 per cent year on year profit slump to 1.152 billion Euros last year.Its earnings from business with customers improved by 10 per cent in 2009.Cernko caused controversy recently by claiming thousands of jobs would be at risk if political leaders issued stricter rules and taxes on financial transactions and bank institutes assets as planned by the Austrian government and by some EU leaders.He warned a “significant” number of jobs could be lost if decision-makers put extra pressure on banks. “Between 5,000 and 10,000 jobs in the Austrian banking sector would be under threat,” Cernko said.Almost 70,000 people nationally have full time jobs in the financial branch.The Austrian coalition of Social Democrats (SPÖ) and Peoples Party (ÖVP) hopes to rake in an extra 500 million Euros a year by introducing a bank solidarity tax in 2011.The government has supported the countrys biggest banks with around eight billions Euros during the past one and a half years to prevent them going under in the recession.