GERMAN BANK EXPANSION IN SOUTH
EAST EUROPE
Dateline 11th July 2003
by Rodney Atkinson
In 1998 the HypoVereinsbank (HVB) became, through the biggest ever
merger in German banking history, Germany's second biggest bank. In
the year 2000 by taking over Bank Austria (The Bank of Austria - by
far the leading Banking group in Austria) HVB became the 3rd biggest
Banking group in Europe. The Bank of Austria kept its name and is now
responsible within the Group for Austria and the whole of East and South
East Europe where it has the biggest bank network in the region with
950 branches in 15 countries and thereby surpasses the Italian Uni Credito,
New York's Citibank and Societe Generale.
Downgrading of the HVB Subsidiaries.
After the take-over of the Bank of Austria the German Bank's ambitious
expansion plans were held up. One reason was serious conflict with the
management of the Austrian bank. The cross border take-over had only
been allowed because the HVB had guaranteed The Austrian Bank wide ranging
autonomy. But shortly afterwards the boards of the HVB subsidiaries
saw that they had de facto had their power removed since the management
responsibility was transferred to the board of the parent company. Secondly
HVB needed to raise new capital in order to finance the billions of
Euros for further take-overs and to prevent their own inadequate capital
ratios leading to a reduction in their credit ratings. (Note that this
is precisely the method used by the European Union to gradually take
over and destroy the nation states of Europe: denial of intent, acquisition
of power then "pragmatic" destruction. The use of the local
name of banks and companies - like the use of national flags and powerless
parliamentary buildings in the political sphere - is designed at least
for a time, to disguise the true ownership. But gradually the new flag
flies over the new possession!)
Massive Growth Potential
Now HVB is floating 25% of the shares in its Bank of Austria subsidiary
and will raise one billion Euro in the largest (continental) European
flotation of the year. Part of the process is the transfer of HVB shares
in the third largest bank in Poland (Przemyslowo-Handlowy PBK SA) to
Bank of Austria which will then own 71 percent of the Polish bank. The
new capital is to be used for further purchases and participations in
eastern Europe. With a high priority 5 year plan the Bank of Austria
(a much less threatening name in Eastern Europe than that of its German
Bank owners) will further expand its leading position in these markets.
The East European Bank market will have massive growth potential declared
the HVB subsidiary which expects a growth rate of 10% per annum.
HVB announced "We will be expanding in this growth region with
added muscle". Further take-overs have already been announced:
The Bank of Austria intends to buy up to 81% of the Central Profit Bank
in Sarajevo, the fourth largest Bosnian bank. It is also planned to
buy the whole of CAC Leasing in the Czech Republic and in Slovakia.
Also being considered is the Posta Banka in Hungary which is due to
be privatised in September. (Note that so much of the acquisition of
East European assets has been through privatisation of companies which,
due to the failure of communism, had no rational price attached to them
and which should have been able to develop, with Western help and perhaps
minority participation to the benefit of those countries and employees.
In this case it is interesting to note that Bosnia, Slovakia and Hungary
were part of the axis powers during the last war. It is far more controversial
to acquire banks etc in eg The Czech Republic or Serbia)
Sources:
Hypo-Vereinsbank rüstet sich für Zukäufe; Die Welt 23.05.2001
HVB: Streit mit Bank Austria verschärft; Die Welt 02.03.2003
Bank Austria soll Milliarden bringen; Süddeutsche Zeitung 24.06.2003
Aktien der Bank Austria kommen zu 27 bis 31 Euro auf den Markt; Frankfurter
Allgemeine Zeitung 24.06.2003
