The former union bank Bawag: Unspectacular but successful

Bawag’s history on the Vienna Stock Exchange has been crowned with success. The price has risen sharply, especially in the last two years. The IPO itself in 2017 was a success. It was the largest ever on the Vienna Stock Exchange – measured in terms of the issue volume of almost two billion euros – and the largest bank IPO in the German-speaking region since 2000.

Things were bad for the institute around ten years before the IPO. At that time, high losses were exposed as a result of risky speculation. The scandal led to criminal convictions of managers, serious financial damage to the then owner, the ÖGB union, and ultimately to the sale of Bawag to the US financial investor Cerberus.

But that’s all yesterday’s news. The bank has become a sought-after investment for investors at home and abroad. After Cerberus’ exit, the largest shareholders each hold around six percent.

Record numbers

CEO Anas Abuzaakouk, who works in the background, presented record figures for 2024. The profit rose to 760 million euros, this year the target of 800 million euros will be exceeded, after it was 630 million euros in the first three quarters. This almost promises a further increase in the dividend, which was 5.50 euros for 2024.

“Bawag still holds surplus capital. An increase in the dividend or a share buyback program is possible at any time,” says Erste Group analyst Thomas Unger in an interview with KURIER. There was already one in the summer of this year worth around 175 million euros.

“The entire sector did very well, especially due to the normalization of the interest rate landscape,” continued Unger. Net interest income rose by almost 50 percent in the third quarter compared to the same period last year. At Bawag, the acquisitions in Germany (Barclays Consumer Bank) and the Netherlands (Online Bank Knab) in particular led to a significant increase in profits. The rating agency Moody’s confirmed its rating for Bawag and raised the outlook from “stable” to “positive”.

Record numbers

CEO Anas Abuzaakouk, who works in the background, presented record figures for 2024. The profit rose to 760 million euros, this year the target of 800 million euros will be exceeded, after it was 630 million euros in the first three quarters. This almost promises a further increase in the dividend, which was 5.50 euros for 2024.

“Bawag still holds surplus capital. An increase in the dividend or a share buyback program is possible at any time,” says Erste Group analyst Thomas Unger in an interview with KURIER. There was already one in the summer of this year worth around 175 million euros.

“The entire sector did very well, especially due to the normalization of the interest rate landscape,” continued Unger. Net interest income rose by almost 50 percent in the third quarter compared to the same period last year. At Bawag, the acquisitions in Germany (Barclays Consumer Bank) and the Netherlands (Online Bank Knab) in particular led to a significant increase in profits. The rating agency Moody’s confirmed its rating for Bawag and raised the outlook from “stable” to “positive”.

Almost eleven million

By the way, the high remuneration of the board of directors was once again a central topic at Bawag’s general meeting this year. Last year the remuneration report was rejected and there were calls for improvements. These have now been done. In the new compensation program, the majority of compensation now consists of variable components. Nevertheless, there were still around 30 percent dissenting votes in the vote. According to the annual report, Abuzaakouk received 10.9 million euros last year. He remains the highest-earning ATX manager.

And what does bank boss Abuzaakouk himself say about the current financial year? “The year 2025 was of fundamental importance for Bawag: We completed two strategic acquisitions and thereby developed into a pan-European and US banking group,” says boss Abuzaakouk when asked by KURIER. The development of the share price primarily reflects a market environment in which European banks are once again more valued. “I am very proud of what we have achieved as a team over the past ten years.”