Bank Austria Creditanstalt (BA-CA) will expand its branch network in Central and Eastern Europe (CEE) from 850 offices to about 1,050 by 2007.
The bank says the number of clients will increase, without taking acquisitions into account, from 4.0 to 4.5 million by 2005.
Return on equity before taxes within the CEE business segment is to be raised from currently 17.3 to 25 per cent.
At the same time, BA-CA intends to strongly enhance mobile sales and sales cooperations with other companies. “We have set ourselves a clear target: We want to become the undisputed number 1 in CEE,” says Erich Hampel, Chairman of the Managing Board of Bank Austria Creditanstalt.
BA-CA currently operates 850 branches in 11 CEE countries. The bank intends to open 80 new branches in Poland by 2007. Plans call for the banking network in Hungary to be more than doubled from 38 to over 100 offices. In South East Europe, BA-CA will create 30 new branches in addition to 32 offices acquired from the Croatian Finance Agency FINA last year. BA-CA is currently in the process of integrating those branches into its existing network in Croatia. The integration process is to be completed in the course of the summer. At the same time, BA-CA will expand its mobile sales activities in all CEE countries. BA-CA is already using this sales method very successfully in the Czech Republic.
BA-CA’s business model in CEE is based on the strategy of extensive universal banking. “We do not restrict our activities to a few countries or a few selected business segments. We offer all the services of a universal bank in all the countries where we maintain a presence,” says Hampel. BA-CA has been especially active in the retail banking business for the last two years. “By acquiring Bank Biochim in Bulgaria, Splitska banka in Croatia, Central Profit Banka in Bosnia-Herzegovina, and by taking over the remaining shares in Bank BPH in Poland, we have created perfect conditions for further growth in retail business,” Hampel continues.
Parallel to organic growth, BA-CA intends to expand its banking network through acquisitions. “Possibilities to acquire additional banks will result both from the ongoing privatisation process in selected CEE countries and the further consolidation of the CEE banking market,” Hampel explains. “In any case, BA-CA will play an active role.” Thanks to its tier 1 ratio of 7.8 per cent and IAS equity capital in excess of 6 billion euros, BA-CA is well capitalized for further expansion.
BA-CA started its successful CEE operations 30 years ago with the founding of a representative office of the former Creditanstalt in Budapest. After the collapse of the Iron Curtain, BA-CA continued to expand into the other CEE countries. Today, the bank is active in 11 countries. In cooperation with HVB Group, which has subsidiaries in Russia, Ukraine and the Baltic States, it is represented in a total of 16 markets.