BAWAG P.S.K.
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| Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG | |
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| Type | Public |
|---|---|
| Founded | 2005 |
| Headquarters | Vienna, Austria |
| Key people | Ewald Nowotny, Chairman of Management Board |
| Industry | Finance and Insurance |
| Products | Commercial banking, Investment banking, Private banking, Asset management |
| Revenue | € bn (as of 2004) |
| Website | www.bawagpsk.com |
BAWAG P.S.K. is the fourth largest bank in Austria. It was formed in October 1, 2005, by the merger of the separate P.S.K. and BAWAG banking firms.
BAWAG, was founded in 1922 by former Austrian Chancellor, Karl Renner, to extend favourable terms of credit to ordinary people, as the 'Austrian Worker's Bank'. The bank was forced to close in 1934, but resumed its operations post World War II in 1947. In 1963, it took the name of Bank für Arbeit und Wirtschaft AG, BAWAG, or, in English, 'Bank for Labour and Business Corporation'. As of 2004, the bank's majority shareholder was the ÖGB, the Austrian Trade Union Federation.
By 2004, the bank had assets of 56.2 billion euros, and a 170 million-euro annual profit.
[edit] Refco Scandal
In October 2005, BAWAG approved a loan of 425 million euros to Phillip R. Bennett, then CEO of the commodities broker, Refco, collateralized against Bennett's own holdings in the firm. However, the reason he required the money was that he had lent an undisclosed 430 million dollars of the broker's money to himself in an attempt to cover up the company's bad debts. The very day after BAWAG made Bennett the loan, the irregularities were made public, triggering a number of regulatory investigations. Refco has since declared chapter 11 bankruptcy, making BAWAG's collateral essentially worthless. The Austrian National Bank and Financial Market Authority are now investigating.
In April 2006, creditors of Refco sued BAWAG for over $1.3 billion, alleging that the bank had colluded to hide Bennett's fraudulent transactions back to at least 2000, and that the bank owned far more of Refco than it had ever revealed in regulatory filings.[1]
[edit] References
- ^ "Refco's Creditors Sue Austrian Bank", Wall Street Journal, April 26, 2006, page C5
[edit] External links
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