The two largest shareholders, the UniCredit Bank Austria (50.1 percent) and the Raiffeisen Bank International (25 percent) accounts for around half of the credit card portfolio Card Complete Service Bank AG and would rather run this business themselves in the future.
This seals the destruction of Austria’s market leader with 1.2 million cardholders and a comprehensive network of acceptance points.
The rest of the company, which has around 300 employees, is to be transferred to the British DNA Payments Group go. The founders and owners of this fintech are two Kazakh businessmen, the banker Arif Babayev and his partner Nurlan Zhagiparov. It is very likely that the deal will come about and the negotiations are “in the final stretch,” according to insider circles.
„Migration“
The new shareholders must undergo an ownership control procedure with the financial market supervisory authority, and the competition authority must also agree. Babayev called on Bank Austria representatives at the FMA a few months ago, but the FMA did not want to comment on this.
However, the deal is controversial. The third shareholder, the AVZ Foundation of the City of Vienna (a relic of Bank Austria’s predecessor Zentralsparkasse), voted against the transfer of the card portfolio, which is referred to as “migration” in the annual general meeting minutes. The works council also spoke out against it in the supervisory board.
Bank Austria and RBI should be able to obtain the card portfolio that they themselves have provided to Card Complete through their customers quite cost-effectively. Around 9 million euros are rumored.
Doubts about evaluation
As we hear, the AVZ doubts the expert’s assessment of the portfolio as being too deep. According to industry experts, the range for the market value of a credit card ranges from 10 to 100 euros, but this apparently remains at the lower end of the scale.
Babayev is now said to have significantly reduced the purchase price for the rest of the company. The negotiations probably started with a range between 70 and 80 million, currently it is between 50 and 60 million. Buyers have been explored for five years; the Card Complete group was once valued at 250 to 300 million euros.
Babayev is the only interested party for an outright bid. His fintech has developed a processing system for credit card business. The worst case scenario would be the liquidation of the company, which was founded almost 40 years ago, but none of those involved want that.
In any case, AVZ would like to remain in the company. If the sale to Babyev goes as planned, the foundation would increase its stake slightly to 27 to 28 percent.
To be on the safe side, capital measures were also decided at the general meeting. These are necessary so that Card Complete can meet the capital requirements for Basel IV and cover the costs of “migration”. The final shareholders’ meeting is scheduled for the beginning of December.
There is a backlog of investments in the company, especially in the IT area. The bank’s shareholders deliberately saved it, the workforce criticizes. The question is whether the business model is still viable. There are large specialized providers for the infrastructure, and most banks now issue cards themselves.