Best bank: Erste Group
It was a mixed year in Austrian banking in 2023. Higher eurozone interest rates bolstered banks’ net interest margins, but at the end of the year the bankruptcy of Austrian real estate group Signa shone the spotlight on what Moody’s said was €2.2 billion of lending by Austrian banks to Signa.
Erste Group does not appear to be among the Austrian or international banks with most exposure to Signa, and more generally its business in Austria appears to be doing well.
Erste Bank Oesterreich and subsidiaries saw net profit more than double to €681 million in 2023, with return on allocated capital rising to 32.6% and the cost-to-income ratio falling to 42%. The local savings banks segment saw a similar increase in net profit, reaching €122 million while its cost-to-income ratio fell to 47.3%. Erste’s other Austrian business, which includes corporate banking, markets, real estate financing and asset management, saw the net result rise by 45.9% to €586 million, with the cost-to-income ratio stable at 38.6%.
At group level, Erste posted net attributable profit of almost €3 billion in 2023, up 38% on 2022, with the return on equity rising to 15.9%. Its share price has also benefited from a capital return programme, which includes plans to ramp up share buybacks.
Duriing awards period the bank launched a new private banking card with cash back, a buy-now-pay-later option, membership in Austria’s largest gourmet club, Falstaff, and discounted rates at luxury hotels. It also launched a new equity release product for homeowners in Austria, allowing older customers the chance to finance renovations, healthcare, support children or to top up pensions.
On the digital side, the bank launched an Austrian prototype for a new chatbot service focused on financial health. It also continued to work on rolling out its new app for small and medium-sized enterprises, George Business, including a new Austrian partnership with Yakoy, an artificial intelligence-driven spending management software company.
Erste Bank Oesterreich concluded a €400 million guarantee framework agreement with the European Investment Bank targeting mid-cap clients last year. It has further driven its corporate business forward with deals such as a €195 million club loan for a sustainable paper and packaging project developed by local firm Heinzel. It helped arrange the financing with contributions from Austrian export credit agency OeKB.
Best digital bank: Erste Group
In October 2023, Erste Group launched a first-of-its-kind artificial intelligence solution in Austria, focused on improving financial proficiency among clients. The Financial Health Prototype uses a natural language processing-based chatbot to share financial knowledge effectively and in simple terms.
The bank’s George Business app provides online banking to corporate clients offering multi-account management, card management, signing authorizations and customizable user management. By the end of February 2024, more than 37,000 businesses in Austria had activated George Business.
The bank continues to invest in digital solutions specifically for its corporate segment. In 2023, it entered into a partnership with Yokoy, an AI-based spend management solution, which can significantly minimize time spent on expense-related business processes. Yokoy is due to be rolled out in Austria this year.
Best bank for ESG: UniCredit Bank Austria
UniCredit Bank Austria had a very active year in sustainable finance in 2023 across corporate bonds and loans, both in terms of number of deals and volume. It also continued its social programmes through its social impact banking business, which includes microfinancing, impact financing and financial literacy.
In February 2023, the bank issued its second green bond, raising €750 million. Proceeds of the green mortgage-covered bond were used to finance or refinance environmentally friendly buildings.
The bank’s GoGreen account, which includes cashback for clients and a bank pledge to donate the equivalent of the deposit amount to sustainable causes, became its most popular account in 2023.
UniCredit Bank Austria again presented its Sozialpreis in 2023, awarding €90,000 to 26 outstanding social initiatives. UniCredit Foundation and Tech Austria signed a €5.5 million pan-European partnership, which saw UniCredit Bank Austria provide 19 volunteers to teach in 15 classes at nine schools, reaching around 290 students.
Best bank for corporate responsibility: Bawag
Bawag’s focus on social responsibility saw it surpass its previous record in corporate volunteering last year. In 2023, 400 employees, representing 15% of the bank’s workforce, undertook 3,700 hours of corporate volunteering. Employees dedicated over 2,500 hours of volunteering to the Samariterbund Wien, one of the largest social organizations in Austria, which provides health services, including ambulance services, in Vienna. Almost 160 employees participated in cleanup initiatives with Ocean Blue, collecting nearly 500 kilograms of waste in various locations during the year.
The bank supported several disaster relief efforts. It funded relief for the floods in Corinthia and Styria, and the earthquake in Syria and Turkey. It also supported Licht ins Dunkel, a yearly telethon collecting donations on Christmas Eve. The extended management board donated €1 million, which was 100% matched by the bank.
Best bank for corporates: Raiffeisen Bank International
Raiffeisen Bank International focused on digitizing essential services for its corporate clients in 2023, particularly trade finance facilities and letters of credit. The bank made improvements to its eTradeOn platform, providing clients with real-time access to transactions and offering an environmental, social and governance (ESG) flagging tool, which allows for the transfer of ESG data.
Digital services for customers were enhanced through the bank’s digital eFinance platform, which facilitated €1.3 billion in lending online in 2023.
In 2023, Raiffeisen became the first bank in Austria to fully digitize its know-your-customer process.
The bank also improved its multi-currency service in 2023. Corporate clients can send payments in 30 currencies with real-time conversion throughout the day.
