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Financial sector staff will get more from next month, it has been announced.

Finance sector salary increase sealed

Financial sector staff will get more from next month, it has been announced.

Negotiators agreed about an income increase of 3.47 per cent on average yesterday (Thurs). The decision came after clerks were given the all-clear by the Federal Trade Union (ÖGB) to down tools in an attempted pressure increase. They initially called for a salary hike of 4.9 per cent while bank bosses suggested an increase of only 1.5 per cent.

The Austrian Association of Private Employees (GPA-djp) announced yesterday it accepted the latest suggestion by financial sector company chiefs. The settlement means that the wages of bank employees who earn comparably little will benefit more than their rich colleagues.

Around 80,000 people are working in the domestic banking sector. The industry’s most powerful players are Erste Bank Group AG (Erste Bank) and Bank Austria (BA). BA is part of Italian bank UniCredit. It manages the Italian finance institute's operations in 14 Eastern European (EE) countries. UniCredit, which has 160,000 employees, sustained losses of more than nine billion Euros last year.

BA’s annual net profit decreased by 70.5 per cent to 209 million Euros from 2010 to 2011. The bank’s performance was tarnished by the challenges of its Kazakh subsidiary company. The bank might be sold soon. BA also lost money because of the reassessment of the value of Greek government bonds made necessary by the economic downturn in Greece and the decision to cancel most of the European Union (EU) member’s debts.

BA head Willibald Cernko said he was nevertheless "proud" about how BA did in 2011. Cernko stressed that BA had not plunged into the red in any of the past four years – despite the global economic turmoil. BA’s total assets soared from 193 billion in 2010 to 199.2 billion Euros in 2011, he explained.

Erste Bank sustained a loss of 719 million Euros last year despite the strong performance of its Austrian branch which achieved a profit of 177.6 million Euros, up from 166.7 million in 2010. Especially Erste Bank’s representations in Romania and Hungary are in trouble. Erste Bank CEO Andreas Treichl said the bank planned to reduce its workforce level by around 450 in the country. Hungary is the seventh-most important trading partner of the Austrian economy.

Erste Bank is not the only Austrian financial institute which struggled in Hungary last year. BAWAG PSK (BAWAG) head Byron Haynes currently tries to find a buyer for its five per cent interest in Hungarian bank MBK. BAWAG – which has 1.6 million customers and over 4,000 staff – has reduced its share in MBK in recent years.

BAWAG had profits of 122.5 million Euros last year, slightly more (plus 0.7 per cent) than in 2010. The Vienna-based bank was established in 1922 and acquired by US investment firm Cerberus Capital Management (Cerberus) five years ago.

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BAWAG  ndash  Erste  Austrian  Hungary  bank  Euros  Cernko  billion  European  Employees  salary  Financial  Bank  sustained  profit  UniCredit  performance  rsquo  Italian

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