Thanks to consistent cutbacks, the billions in losses during the financial crisis became a solid profit buffer.
Bankruptcy was not far away: due to financial adventures in Eastern Europe and real estate investments, the Volksbank Group suffered billions of dollars in losses between 2008 and 2012. Even the state had to help with so-called participation capital to avoid a total flop.
During this dramatic phase, those responsible brought in a top manager from outside. Gerald Fleischmann (Please note: not the ex-spokesman of ex-Chancellor Kurz) had previously proven his skills at Erste Bank in Vienna and Salzburg – now he had to save the Volksbanken Group from collapse.
After cutbacks, the bank is again very profitable
The smart banker did not hesitate for long: thanks to a wave of mergers, 50 Volksbanken became only nine, the 460 branches were reduced to an efficient 230 and the number of employees fell from 5,000 to approximately 3,000 625 to 480 million euros. It could therefore happen that a profit of no less than 326 million euros suddenly appeared on the balance sheet.
The state aid has now been repaid, the strategy is focused on personal advice, the regionality as a cooperative is maintained and the institute continues to surprise with innovative products, some of which also come from cooperation partners in neighboring countries.
The emphasis is on business in Austria
Gerald Fleischmann, who has been at the helm of the Volksbanken Group for nine years: “We have sold our Eastern European bank, as well as other investments (such as in Liechtenstein). We fully concentrate on doing business in Austria and have done particularly well there.”
Personal support is the key word here – while other institutions want to do everything digitally, “we still have personal advisors. And part of our profits are reinvested in the region in question, which also corresponds to the cooperative idea. The time of crisis is over, now growth is the order of the day.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
