Sberbank set to spend €300mn

The new owner of Volksbank International (VBI) has revealed plans to invest hundreds of millions of Euros.

Sberbank – which transferred 505 million Euros for the finance institute to Volksbank AG (ÖVAG) in February – announced yesterday (Tues) it would spend 300 million Euros on the restructuring of VBI to support the planned expansion. Sberbank, which is based in Russian capital Moscow, explained that it already increased the workforce level of VBI’s Viennese office from 60 to 100 – and added that the plan was to hire another 50 throughout this year.

Sberbank also announced that Gerhard Randa will join the VBI supervisory board. Randa was part of the executive board of Bank Austria (BA) – which is currently headed by Willibald Cernko – for several years. VBI bosses said already a few days after the takeover of VBI that Austrian entrepreneur Siegfried Wolf would become the chief of the financial institute’s supervisory board.

Sberbank said VBI’s name would be changed in the coming weeks. It was revealed yesterday that the Russian bank planned to do business in Austria in the foreseeable future. Sberbank explained it wanted to concentrate on business clients in the country which is, according to analysts, seriously overbanked. Bosses of Russia’s leading bank added that they were also very interested in entering Poland and Turkey.

VBI has not been active in Austria so far. The bank used to manage ÖVAG’s international operations. ÖVAG was nationalised shortly after Sberbank bagged all but the ailing Romanian department of VBI. The move followed the Austrian government coalition’s decision to take over Hypo Group Alpe Adria (HGAA) and Kommunalkredit.

People’s Party (ÖVP) Finance Minister Maria Fekter and Finance Secretary Andreas Schieder of the Social Democratic Party (SPÖ) plan to increase the domestic bank tax to partially compensate the additional expenses caused by the nationalisation of ÖVAG. The state raked in around half a billion Euros with the bank solidarity charge in 2011. Earnings are expected to rise to 625 million Euros this year.

Former BAWAG PSK (BAWAG) manager Stephan Koren – whose late father Stephan sen. served as ÖVP finance minister for two years until 1970 – rumoured to replace Gerald Wenzel as CEO of ÖVAG. The bank suffered a loss of almost 1.1 billion Euros in 2009. ÖVAG managed to make a profit of 55 million Euros in 2010 before it sustained losses of 1.34 billion Euros last year. These developments, the envisaged restructure measures and the need to recapitalise the bank means that the Republic of Austria’s chances to see the one billion Euros of participation capital which it poured into the struggling bank in the past years again.