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BAWAG puts on brave face over 2009 losses

Bank bosses at BAWAG PSK said it had losses of 22.2 million Euros in 2009 but added this was better than the previous year which saw losses of 547.5 million Euros.

Speaking yesterday (Thurs) BAWAG chief Byron Haynes said 2010 would be a challenging year but he believed the bank would return to the black by its end since it had taken "significant" steps in the areas of profitability and performance in 2009.

He said recession and a continued weak business cycle had raised risk costs last year and put margins under pressure, but pre-tax earnings had risen from a minus 614.6 million Euros in 2008 to a positive 45.5 million Euros last year.

He added that the bank had received 550 million Euros in state assistance in 2009.

Haynes denied media reports that creditors of bankrupt US investment bank Lehman Brothers had any claim on BAWAG or that Lehman had acquired BAWAG shares before going bankrupt.

Haynes said the bank�s owner, US investment fund Cerberus, "controls 100 per cent of the bank�s shares" and added that the Austrian government had been fully informed about the bank�s ownership structure.

BAWAG must present a new business plan to the European Commission (EC) in Brussels after getting state assistance. Haynes said the new plan might be quite different from the present one.

BAWAG is Austria�s fourth largest bank.

Its former General Director Herbert Elsner, 74, has spent more than three years behind bars since his extradition from France to Austria on 13 February 2007. He has been convicted of fraud and cooking the books during his tenure at the bank.

He was sentenced to 9.5 years in prison in 2008, a sentence that does not yet have judicial force. Elsner�s eight co-defendants were also convicted but are not behind bars pending the outcomes of their appeals.

The courts have rejected 13 requests by Elsner�s lawyers Kresbach and Wolfgang Schubert for his release on medical grounds because of the danger that he might flee if released. He has a heart condition.

Elsner has been receiving treatment at the medical unit of the Josefstadt prison facility in Vienna. He had previously offered to pay bail of two million Euros in return for release from prison.

Austrian Times

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