Banking in Austria

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View of the Freyung towards Am Hof [de] in Vienna, with, from left to right, the former head offices of Creditanstalt, Niederosterreichische Escompte-Gesellschaft (later Landerbank, in the background), Anglo-Austrian Bank, and Austro-Hungarian Bank Freyung Banks.jpg
View of the Freyung towards Am Hof  [ de ] in Vienna, with, from left to right, the former head offices of Creditanstalt, Niederösterreichische Escompte-Gesellschaft (later Länderbank, in the background), Anglo-Austrian Bank, and Austro-Hungarian Bank

The banking system in Austria plays a pivotal role in the country's economy, ensuring financial stability and providing essential services to both individuals and businesses. The Austrian banking system is characterized by a three-tier structure, consisting of joint-stock banks, savings banks (Sparkassen), and cooperative banks (Raiffeisenbanken and Volksbanken).

Contents

The central bank, Oesterreichische Nationalbank (OeNB), is responsible for the country's monetary policy and the supervision of the banking sector. The Financial Market Authority (FMA) is the primary regulatory body for the Austrian financial market, including banks, insurance companies, and other financial institutions.

Banking system

Regulations

Since the introduction of the Kreditwesensgesetz (KWG) in 1979, the boundaries between the various types of credit institutions have gradually become blurred. Many banks have developed into universal banks offering a comprehensive range of banking services. Prior to the 1979 KWG, the Austrian banking system was still governed by the Kreditwesengesetz, which had been in force since October 1, 1938 in Nazi Germany and the associated Austria. The 1979 KWG was created as a result of the increasing liberalization of the banking system and the general trend towards universal banks. The rapid growth and increased activity of Austrian banks abroad made it necessary to adapt to international standards, which was regulated in the 1986 amendment to the law. On January 1, 1994, the KWG was replaced by the new Banking Act (Bankwesensgesetz- BWG), which was drafted in view of EU conformity and also contains improved provisions for creditor and consumer protection. In 2002, the Austrian Financial Market Authority (FMA) was founded, which supervises the Austrian banking sector. Due to the economic interest in a stable financial sector, financial market participants, the financial market infrastructure (stock exchange, securities depository) and securities trading are subject to state supervision.

Oesterreichische Nationalbank and Oesterreichische Kontrollbank

The central bank of Austria, Oesterreichische Nationalbank (OeNB), is responsible for the country's monetary policy, the issuance of banknotes, and the supervision of the banking sector. Established in 1816, the OeNB operates as an independent institution within the framework of the European System of Central Banks (ESCB) and the Eurosystem, both of which were established in 1998. [1]

The OeNB's primary objective is to maintain price stability and contribute to the stability of the Austrian financial system. In addition to its monetary policy function, the OeNB is also responsible for ensuring the smooth functioning of payment systems, managing foreign exchange reserves, and compiling financial statistics.

Great importance is attached in Austria to the Oesterreichische Kontrollbank Aktiengesellschaft (OeKB). It is Austria's central financial and information service provider for the export industry and the capital market. Its services are available to companies and financial institutions as well as institutions of the Republic of Austria. The services of OeKB include Export Services, Capital Market Services for stock exchanges, issuers, financial service providers and investors as well as Energy Market Services for the electricity and gas market. Furthermore, OeKB is a sought-after issuer on the international bond market.

Financial Market Authority

The Financial Market Authority (FMA) is the primary regulatory body for the Austrian financial market, responsible for supervising banks, insurance companies, pension funds, and other financial institutions. [2] Established in 2002, the FMA aims to ensure the stability, transparency, and integrity of the Austrian financial market. The FMA operates as an independent, integrated authority, working closely with the OeNB to maintain a stable and reliable financial system. [3]

Largest banks in Austria

The largest Austrian credit institutions by balance sheet total in 2018

Ranking 2018BankBalance sum (Billions)
1Erste Group Bank AG236,79
2Raiffeisen Bank International AG - RBI140,12
3UniCredit Bank Austria AG99,03
4BAWAG Group AG44,70
5Raiffeisenlandesbank Oberösterreich AG41,99
6Raiffeisenlandesbank Niederösterreich-Wien AG26,97
7Oberbank AG22,21
8Steiermärkische Bank und Sparkassen AG15,77
9Raiffeisen-Landesbank Steiermark15,12
10Hypo NOE Landesbank für Niederösterreich und Wien AG14,06

Notable bankers in Austria

The following former and current bankers have made an important contribution to the development of the Austrian banking industry and continue to develop it in their position as CEO:

Neobank in Austria

The neobank industry in Austria is an emerging sector in the country's financial landscape, as digital banking services continue to gain traction among consumers seeking convenience, simplicity, and innovation. Neobanks are digital-first banks that offer a range of financial services, such as personal accounts, loans, and payment services, primarily through mobile and web applications, with little or no reliance on physical branches.

Key Players in the Austrian Neobank Industry:

  1. N26: A prominent German neobank, N26 has expanded its operations to Austria [4]
  2. Bank99: A subsidiary of the Austrian Post, Bank99 is a digital bank targeting both consumers and businesses, offering services such as current accounts, loans, and investment products. Bank99 combines the digital-first approach of neobanks with access to physical branches in post offices across Austria.

Stock exchange

A special decree of Empress Maria Theresa (August 1, 1771) provided for the establishment of a stock exchange in Vienna. From the mid-19th century to the beginning of World War I, it was the main capital market of middle and eastern Europe, and from 1918 to 1938, it had continuous international importance as an equity market for the newly founded nations originating from the former monarchy. The exchange also deals in five Austrian and seven foreign investment certificates. The Austrian Traded Index has grown steadily in the past few years, growing 8.71% in 2002, and averaging a growth rate of 10.15% in the past five years. Market capitalization as of December 2004 stood at $85.815 billion, with the index up 57.4% at 2,431.4 from the previous year. There were 99 companies listed on the Wiener Börse AG in 2004.

See also

Related Research Articles

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The Creditanstalt, full original name k. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe, was a major Austrian bank, founded in 1855 in Vienna.

<span class="mw-page-title-main">BAWAG P.S.K.</span> Fourth largest bank in Austria

BAWAG P.S.K. is the fourth largest bank in Austria. It was formed on October 1, 2005 by the merger of the separate banks P.S.K. and BAWAG.

<span class="mw-page-title-main">BAWAG</span> Austrian bank

BAWAG was a bank in Austria founded in 1922. On October 1, 2005, it merged with the separate Österreichische Postsparkasse (P.S.K.) to form the "Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG", shortened as BAWAG P.S.K. In October 2017, BAWAG Group AG, the holding company of BAWAG P.S.K., became a listed company on the Vienna Stock Exchange. Largest shareholders are GoldenTree Asset Management (21.8%) and T. Rowe Price (5.6%).

<span class="mw-page-title-main">Österreichische Postsparkasse</span> Former bank in Austria

Österreichische Postsparkasse (P.S.K.) was a postal savings bank in Austria. It was owned by the Austrian Post Office and thus by the government. It merged on 1 October 2005 with the BAWAG to form BAWAG P.S.K.

Gertrude Tumpel-Gugerell is an Austrian economist who served as a member of the Executive Board of the European Central Bank from 2003 to 2011. She previously served as vice-governor of the Oesterreichische Nationalbank from 1998 to 2003. She has been a member of the Council of the University of Leoben.

<span class="mw-page-title-main">Andreas Dombret</span>

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<span class="mw-page-title-main">Raiffeisen Banking Group</span> Cooperative banking group in Austria

The Raiffeisen Banking Group is a group of cooperative banks in Austria. The Austrian Raiffeisen banks are not consolidated under a single parent entity but are financially linked through a common institutional protection scheme and deposit guarantee scheme. The group's international operations, by contrast, are consolidated under Raiffeisen Bank International (RBI).

The Committee of European Banking Supervisors (CEBS) was an independent advisory group on banking supervision in the European Union (EU), active from its establishment in 2004 to its replacement on 1 January 2011 by the European Banking Authority (EBA) which took over all its tasks and responsibilities following Regulation (EC) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010.

<span class="mw-page-title-main">Financial Market Authority (Liechtenstein)</span>

The Financial Market Authority is the primary financial regulatory agency of the Principality of Liechtenstein. It is an independent, integrated financial market supervisory authority operating under public law and covers all financial markets in Liechtenstein.

<span class="mw-page-title-main">Erste Group</span> Austrian multi-national bank

Erste Group Bank AG is an Austrian financial service provider. It is one of the largest financial service providers in Central and Eastern Europe serving more than 16 million clients in over 2,000 branches in seven countries. Erste Group is headquartered in Vienna and operates as a universal bank.

<span class="mw-page-title-main">Robert Holzmann</span> Austrian economist

Robert Holzmann is an Austrian economist and the current Governor of Austria’s central bank, the Oesterreichische Nationalbank (OeNB). His term of appointment runs from September 1, 2019, to August 31, 2025.

<span class="mw-page-title-main">N26</span> German Neobank

N26 is a German neobank headquartered in Berlin. N26 was founded in 2013 by Rocket Internet, an incubator, and operates in various European Union member states that are members of the Single Euro Payments Area (SEPA). N26 provides transaction accounts and debit cards, with overdraft and investment products and premium accounts available under a subscription business model.

<span class="mw-page-title-main">Hypo Noe Landesbank</span> Austrian regional bank

HYPO NOE Landesbank für Niederösterreich und Wien AG is an Austrian regional bank. It is one of the oldest and largest regional banks and was created in 1888.

<span class="mw-page-title-main">Raiffeisenlandesbank Oberösterreich</span>

Raiffeisenlandesbank Oberösterreich AG is a credit institution and grouping of cooperative banks founded in the 1900s and headquartered in Linz, Austria. It is the central institution of the Raiffeisen Banking Group in Upper Austria and the largest of Austria's eight provincial central banks.

<span class="mw-page-title-main">Anglo-Austrian Bank</span> Former bank in Vienna

The Anglo-Österreichische Bank, in shorthand Anglobank, was a bank founded in Vienna in 1863 with an extensive branch network in the Habsburg Monarchy and later in its successor states, primarily Austria and Czechoslovakia.

Helmut Ettl is an Austrian economist and European banking and finance specialist.

<span class="mw-page-title-main">Financial Market Authority (Austria)</span> Austrian financial regulator

The Austrian Financial Market Authority is Austria's integrated financial regulatory authority and has been its national competent authority within European Banking Supervision since 2014. It is responsible for the supervision of credit institutions, payment institutions, insurance companies, pension funds, Fund managers, licensed securities service providers, and stock exchanges.

<i>Sparkassengruppe Österreich</i> Savings banks network in Austria

The Sparkassengruppe Österreich brings together all savings banks in Austria. Tracing its origins to 1819, it serves around 4 million customers in 797 branches with more than 15,500 employees, with a customer share in Austria around 31.2% as of December 2022. The group has a complex decentralized structure but relies critically on Erste Group Bank AG, which owns the main local savings bank in Vienna, operates central functions, owns and manages subsidiaries outside of Austria, and consolidates group accounts. The Österreichischer Sparkassenverband acts as the group's national representative body.

References

  1. ↑ "About us - Oesterreichische Nationalbank (OeNB)". www.oenb.at. Retrieved 2023-04-10.
  2. ↑ "Financial Market Supervision". bmf.gv.at. Retrieved 2023-04-10.
  3. ↑ "FMA".
  4. ↑ "German online bank N26 to launch crypto trading in Austria". Yahoo Finance. Retrieved 2023-04-10.
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