Bawag, founded in 1922, is Austria’s fourth-largest bank by assets. It was bought in 2006 by US investment group Cerberus after the bank almost collapsed as a result of links to failed US commodities and financial derivatives firm Refco.
Cerberus is better known in Ireland as one of the most active buyers of distressed Irish loans in the wake of the financial crisis.
After a decade of cost-cutting and restructuring, including branch and staff cuts, as the bank moved towards a digital-first strategy, Cerberus floated Bawag on the Vienna stock market in 2017.
The Austrian bank’s chief executive, Anas Abuzaakouk, formerly worked for Cerberus and was heavily involved in the bank’s transformation before taking charge in March 2017.
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While there had been a narrative in Irish financial circles that a mainstream bank would be more politically acceptable than a private equity buyer, Bawag is expected by analysts to accelerate cost-cutting at the bank, despite its commitment to maintaining a “meaningful branch presence and key decision-making activities in Ireland”.
PTSB last month set a target for its cost-income ratio to fall below 60 per cent by the end of 2028 from 75 per cent last year. Rivals AIB and Bank of Ireland reported annual cost ratios of 44 per cent and 49 per cent, respectively, last year. Bawag’s was 36.1 per cent.
PTSB has 1.3 million customers, 98 branches, more than 2,900 employees and a mortgage-dominated loan book of €22.2 billion as of the end of last year.
PTSB’s staff numbers fell by 329, or 10 per cent, to 2,918 last year, with a voluntary redundancy programme accounting for 240 of the exits.
Vienna-based Bawag currently has a €72 billion balance sheet. As of the end of last year, PTSB had total assets of €30.4 billion.
[ Austria’s Bawag may have to sweeten its bid to win PTSBOpens in new window ]
Bawag was previously best known in Irish financial circles for buying the remnants of Dublin-based Depfa Bank in 2021.
In March 2023, it took over the company behind fledgling Irish mortgage lender MoCo for a nominal amount of €35. At the time, Bawag had made it clear to its own investors that the Irish business would compete on service and not on price.
It offers three- and five-year fixed rates of 3.8 per cent for loans for greater than 80 per cent of the property value. That compares with a market-leading rate of 3.65 per cent for three-year fixed loans and 3.4 per cent for five-year fixes.
Last year, MoCo also introduced a new easy-access savings account. While the mainstream banks currently offer rates of as much as 3 per cent for certain instant-access savings accounts, Moco’s rate is 2.1 per cent.
However, unlike the legacy banks, which have restrictions on how much a customer can put in such accounts every month, MoCo’s EasySaver account has no such limits.
It also recently held talks to buy nonbank lender Finance Ireland. However, The Irish Times reported last month that those discussions had come to an end without a deal.
