Austrian Post to Keep Branches to Support Bawag Bank's Business

Austria Post will refrain from closing more branches to support the sales of Bawag P.S.K. Bank, the country’s biggest by customer outlets.
Austrian Post, which last year bought a 5 percent stake in Bawag, serves the bank’s customers through its post offices and earned 92 million euros (USD 135 million) from the business in 2007. The Vienna-based postal service has reduced its network by 44 percent since 2001 to make itself more profitable.
“Bawag has 240 branches, we have 1,300,” Chief Executive Officer Anton Wais said during a press briefing in Alpbach, Austria, last night. “If we close branches, we hurt Bawag’s sales, and therefore our investment of about 80 million euros in the bank.”
A group led by New York-based private equity firm Cerberus Capital Management LP bought Vienna-based Bawag in May 2007 for 3.2 billion euros. The group includes the Austrian unit of Italian insurer Assicurazioni Generali SpA, Austrian Post and private investors.
“Cerberus is likely to sell its stake in Bawag in 2012,” Wais said. “As we are a minority shareholder we will probably have no choice but to sell as well. It makes no sense to close branches and diminish the profitability of our investment.”
Ties between Post and Bawag date from 2000, when Bawag bought P.S.K., the bank that belonged to the postal service.

Austria Post will refrain from closing more branches to support the sales of Bawag P.S.K. Bank, the country’s biggest by customer outlets.
Austrian Post, which last year bought a 5 percent stake in Bawag, serves the bank’s customers through its post offices and earned 92 million euros (USD 135 million) from the business in 2007. The Vienna-based postal service has reduced its network by 44 percent since 2001 to make itself more profitable.
“Bawag has 240 branches, we have 1,300,” Chief Executive Officer Anton Wais said during a press briefing in Alpbach, Austria, last night. “If we close branches, we hurt Bawag’s sales, and therefore our investment of about 80 million euros in the bank.”
A group led by New York-based private equity firm Cerberus Capital Management LP bought Vienna-based Bawag in May 2007 for 3.2 billion euros. The group includes the Austrian unit of Italian insurer Assicurazioni Generali SpA, Austrian Post and private investors.
“Cerberus is likely to sell its stake in Bawag in 2012,” Wais said. “As we are a minority shareholder we will probably have no choice but to sell as well. It makes no sense to close branches and diminish the profitability of our investment.”
Ties between Post and Bawag date from 2000, when Bawag bought P.S.K., the bank that belonged to the postal service.