ZURICH May 24 BAWAG PSK, the
Austrian bank owned by private equity group Cerberus Capital
Management, is in advanced talks to buy German regional lender
Suedwestbank to expand its network in western Europe, BAWAG said
It said the parties had agreed to keep details of the
process confidential for now.
Suedwestbank is majority owned by a holding company for
twin brothers Andreas und Thomas Struengmann, billionaires from
their sale of generics drugmaker Hexal to Novartis in 2005. It
has around 100,000 retail and corporate customers in the
prosperous Baden-Wuerttemberg province around Stuttgart.
Suedwestbank has total assets of around 7.4 billion euros
and 650 staff in its 28-branch network that combines traditional
lending with asset and wealth management. It has more than 1
billion euros in assets under management. It made a 2016
operating profit before tax of 79 million euros.
The Struengmann brothers bought Suedwestbank from DZ Bank in
2004 for around 100 million euros. They injected 400 million
euros into the bank three years ago.
Unlisted BAWAG, Austria's fourth-biggest bank, has more than
2.2 million customers and 40 billion euros in assets. It has
said for years it was on the lookout for takeovers -- especially
in Austria, Germany and Switzerland -- to expand.
"Germany is a very, very attractive market for us,"
Chief Executive Anas Abuzaakouk told Reuters, saying a
Suedwestbank takeover would provide a platform for more deals.
"Obviously our first focus will be growing organically,
focusing on retail and corporate lending, but we are also
looking at a number of inorganic opportunities that would be
complementary to Suedwestbank...and that would be bolt-on-type
acquisitions to address the German market," he said.
He hoped to have the Suedwestbank deal signed and closed by
the end of the year. It would be fully funded from BAWAG's own
BAWAG had a fully loaded common equity tier 1 ratio -- a
measure of balance sheet strength -- of 15.7 percent of
risk-weighted assets at the end of the first quarter, and
said it would consistently remain above 12 percent.
Cerberus owns 52 percent of BAWAG and GoldenTree
Asset Management 40 percent. Abuzaakouk declined to speculate
about their future plans, saying only that as financial
investors they would monetise their holding at some stage.
BAWAG has been on the takeover trail, with five other deals
over the past 18 months. In February its easybank direct bank
agreed to buy the PayLife commercial card issuing business of
SIX Payment Services Austria.
Unlike other Austrian banks that expanded heavily in central
and eastern Europe, BAWAG focuses on Austria, where it holds
two-thirds of its customer loan book. It also does retail,
corporate, commercial real estate and portfolio lending in
western Europe and the United States.
(Additonal reporting by Alexander Huebner)