Erste Bank gobbles up Weinviertel Savings Bank

Erste Bank has announced it acquired Weinviertel Savings Bank (Weinviertler Sparkasse).

Erste Bank said in a press release it had signed a contract for purchase of a 99 percent interest in the savings bank and the deal would be final by the end of February 2009. A one-per-cent interest will remain in the hands of the savings bank’s private foundation. Erste Bank has not divulged the price of the purchase.

 

Erste Bank added the deal would strengthen Weinviertel Savings Bank without any diminution of its focus on the regional economy and promised nothing would change for Savings Bank customers, who would retain the same bank-account numbers, codes and bank contacts.

 

Werner Stolarz, a member of Weinviertel Savings Bank private foundation’s board of directors, and Willibald Jordan, board chairman of Eggenburg Savings Bank private foundation, agreed with Erste Bank.

“The deal is good for the Savings Bank and the foundations. Weinviertel Savings Bank has a solid future partner in Erste Bank,” said the director and board chairman in a joint statement.

Elisabeth Bleyleben-Koren, board chairwoman of Erste Bank Austria, strove to redefine the new fields now open for Erste Bank following this move, “The savings bank will continue to play the role of a provider of banking services to both private individuals and firms in the region.”

Hans Jurgen Broder, the board chairman of the Savings Bank, added that “Having Erste Bank as a shareholder means the strengthening of our bank at a time of great difficulty.”

 

The Weinviertel Savings Bank is active in Austria, the Czech Republic and Slovakia. The bank has 90 employees at 15 locations and 22,000 customers in Lower Austria. The bank’s leasing subsidiaries employ 120 people at 30 locations in the Czech Republic and Slovakia.

The savings bank has assets worth 570 million Euro.

Before the deal with Erste Bank, the Weinviertel Savings Bank private foundation had a 93 percent interest in the Savings Bank, and Eggenburg Savings Bank private foundation had a seven percent interest in it. Erste Bank’s acquisition of the Savings Bank may be related to the current banking credit crunch.

 

Interbank lending in Europe is not going to resume until late next year because it will take more than year-end balance sheets to restore trust, the Erste Group CEO has been quoted as saying.

 

The Financial Times has quoted Group CEO Andreas Treichl as saying visibility for 2009 was so low that banks would want to see how peers performed in the first half of next year before lending to each other again.

“We haven’t a clue what will happen in 2009 or 2010, and, if we don’t gain confidence in our ability to avoid a recession, it will not be easy to restore confidence in the banking system,” he said.

He added the problem for the wider economy was banks were hoarding liquidity pumped into financial markets by central banks instead of lending it, echoing comments by Austrian National Bank (OeNB) Governor Ewald Nowotny in a recent interview. “If I knew how to restart interbank lending, I would talk to (European Central Bank President Jean-Claude Trichet) and to politicians in Europe. But I haven’t a clue,” he said.

Treichl - whose bank is number two in Austria and number three in emerging Europe and the market leader in the Czech Republic, Slovakia and Romania, said he continued to expect the new European Union member states to perform better than countries in Western Europe and the former Soviet Union. “I would not want to be in Kazakhstan at the moment, and I would not want to be in the Netherlands at the moment,” he said. “I want to be in the Czech Republic. I am glad I am in Central and Eastern Europe.”