Three years ago the Austrian BAWAG bought the German Südwestbank. A complete merger is now planned, and the German subsidiary should return its license at the beginning of next year at the latest.
On Thursday, BAWAG confirmed the merger plan to the APA: “We are in coordination with the supervisory authority and are aiming for a merger by the end of 2020 / beginning of 2021 at the latest,” said a bank spokeswoman at noon on request.
The name Südwestbank should remain. “Nothing will change from the customer’s point of view,” said the “Stuttgarter Zeitung” and the “Stuttgarter Nachrichten” (Thursday editions), citing a letter recently sent to employees by the chairman of the supervisory board, Sat Shah. The return of the banking license should take place “no later than the 1st quarter of 2021”. The Stuttgarter Bank, founded in 1922 as Württembergische Landwirtschaftsbank, wanted to operate as a branch of the listed Viennese parent company, German investor magazines knew beforehand.
After the merger, Südwestbank no longer has to prepare its own annual financial statements, nor does it have to keep a separate equity buffer. Another job loss is feared among the German workforce: Since the takeover by BAWAG in 2017, the number of Südwestbank branches has fallen from 28 to 11, and the workforce has been halved from more than 600 to 300 employees. Instead of concentrating on medium-sized companies and wealthy private customers as in the past, the new owners set up an online platform for consumer credit as a second pillar (Qlick).
Despite the new online platform, the total lending business declined in 2019, write the Stuttgart newspapers with reference to the annual financial statements published in the German Federal Gazette. Südwestbank’s net income for the year shrank by around 40 million to 37 million euros.
The result of a regulatory review in February was not particularly flattering: The bank’s credit risk management raised “concerns”, according to the report by the Deutsche Bundesbank auditor to the European Central Bank (ECB), which is available in extracts from the sheets. The number and classification of the deficiencies listed in the report, however, were within the normal range for such audits, and in no way would they have led to the loss of the banking license.
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