Best bank
Bank Austria
Best debt house
CSFB
Best equity house
CA IB
Best M&A house
Goldman Sachs
It was something of a shock for Austrians to wake up one morning last July and discover that the country’s dominant bank, Bank Austria, had been acquired by Munich-based HypoVereinsbank.
Since the fall of the Berlin wall in 1989, Austrian banks have spread out across central and eastern Europe buying and building dominant banking businesses across the region. Now it was the turn of Austrians to fret about seeing their banking system fall under foreign control.
Bank Austria now stands, still under its former chairman Gerhard Randa, who has been appointed to the HypoVereinsbank managing board, as the lead company in Austria and central Europe for HypoVereinsbank, the self-styled bank of the regions. In fact the acquisition, painful though it may have been to national pride and worrying in the light of the acquirer’s real estate loan problems, scarcely alters the Austrian banking industry at all. Bank Austria would like to claim that it stands to benefit by gaining access to more capital and more expertise as part of the HypoVereinsbank group. But the reality is that the bank’s dominance in Austria was sealed back in 1998 when Bank Austria acquired the number two bank in the country, Creditanstalt.
It has maintained both domestic brands, Bank Austria and Creditanstalt, and now claims 20% of the retail market and 35% of wealthier Austrian customers. As well as branch banking, it provides a mobile sales force and an increasingly successful internet operation, with 500,000 online accounts spread across retail and corporate customers by the end of last year. Its reach among Austrian companies is even greater than among retail. It reckons that 50% of medium-size Austrian companies are customers of Bank Austria, while 85% of all major corporates are served by the group in some way. Its share in sectors such as project finance and trade finance stand at around 60%. In all, Bank Austria and Creditanstalt together serve 38,000 Austrian companies.
Following the merger with HypoVereinsbank, Bank Austria now intends to merge its wholesale financial services more closely together into a classic integrated corporate finance approach to Austrian companies. One group will offer conventional loans, structured products and innovative project finance deals to the same customers.
The group’s investment banking unit, still branded as CA IB, continues to play a leading role in the Austrian equity markets both in new issues and in trading, research and sales. It jointly led the latest block trade placing of the Republic of Austria’s remaining 8.18% stake in Vienna Airport International and last year it acted as joint global co-ordinator, together with Merrill Lynch, for the privatization of Telekom Austria. This deal had to be completed amid considerable market turbulence surrounding telecom stocks. Also last year, CA IB was joint global coordinator on the initial public offerings for software company JoWooD Productions Software and for Austrian sports equipment company, Head. In independent polls of fund managers, such as the Reuters survey, CA IB scores highly for the quality of its Austrian equity research. Its distribution strength in Austria makes the firm a favourite for selling foreign deals into Austrian investors.
CA IB is also an active player in Austrian mergers and acquisitions and is now advising Austrian industrial company Leykam on its proposed merger with Druck-und Verlagsanstalt Gutenberg. But the star performer in Austrian M&A work in the past 12 months has been Goldman Sachs, which advised Bank für Arbeit und Wirtschaft on its deal with Oesterreichische Postparkasse, and also advised Bank Austria during its acquisition by HypoVereinsbank.
CSFB has emerged as the leading debt arranger for Austrian borrower, with a strong book of fixed and floating rate bond deals for Austrian financial institutions in euros, dollars, Swiss francs and sterling.
