trending Market Intelligence /marketintelligence/en/news-insights/trending/sga8kvvdybpwi1p2ze0z5w2 content esgSubNav
In This List

Bawag net profit dips in FY'17 as lender seeks takeovers in Germany, Austria


Banking Essentials Newsletter 2021: December Edition


Automating Credit Risk Surveillance Using Statistical Models


Post-webinar Q&A: Speed and Scalability – Automation in Credit Risk Modeling

Case Study

A Chinese Bank Takes Steps to Minimize Risks as it Supports International Trade

Bawag net profit dips in FY'17 as lender seeks takeovers in Germany, Austria

Bawag PSK is examining acquisition opportunities "primarily in Germany" and a "few in Austria," with a total balance sheet size of about €25 billion, Reuters reported, citing CEO Anas Abuzaakouk.

Earlier, the Austrian bank disclosed preliminary results for full year 2017, reporting net profit of €466.6 million, compared to €473.4 million a year earlier. The group booked pretax profit of €517.3 million, above its 2017 target of more than €500 million and up from €460.7 million in 2016.

Bawag noted that it signed an agreement with Austrian Post in February, with retroactive effect of Jan. 1, for an accelerated wind-down of their partnership and said it is targeting a complete separation by the end of 2019, one year earlier than expected. The agreement includes costs of about €110 million over the next two years that were fully accounted for in the 2017 results.

As of Dec. 31, 2017, Bawag's fully loaded common equity Tier 1 ratio stood at 13.5%, above its 2017 target of more than 12% and down slightly from 13.6% a year earlier. For 2018, the group is to maintain a regulatory minimum CET1 ratio, according to the ECB's Supervisory Review and Evaluation Process, of 10.625%, which includes a Pillar 2 guidance of 1%.

The lender reported returns on equity and tangible equity, of 15.3% and 17.9%, respectively, higher than its targets of more than 15% and 16%.

Bawag also disclosed a proposed dividend for the fourth quarter of 2017 of 58 cents per share, which represents 50% of the average quarterly net profit generated in 2017.

For 2018, the group expects to increase pretax profit by more than 5%, deliver an ROTE of above 15% and maintain a minimum fully loaded CET1 ratio of 12%. The company's three-year strategy includes generating pretax profit of more than €600 million in 2020 and maintaining a minimum ROTE of between 15% and 20% and a minimum fully loaded CET1 ratio of 12%.