Two major shareholders, the UniCredit Bank Austria (50.1 percent) and the Raiffeisen Bank International (25 percent) accounts for half of the credit card portfolio Card Full Service Bank AG And in future they will run this business themselves.
It seals the demise of Austria’s market leader, which has 1.2 million cardholders and an extensive network of acceptance points.
The rest of the company, which has about 300 employees, is also to be transferred to the British DNA donation group go The founders and owners of this fintech are two Kazakh businessmen, banker Arif Babayev and his partner Nurlan Zhakibarov. According to inside sources, the deal is likely to come through and negotiations are in “final stretch”.
“Migration”
New shareholders must undergo ownership control procedures with the Financial Markets Supervisory Authority and the Competition Authority must also agree. Babayev invited Bank Austria representatives to the FMA a few months ago, but the FMA declined to comment.
However, the agreement was controversial. A third shareholder, the AVZ Foundation of the City of Vienna (a relic of Bank Austria’s predecessor Zentralsparkasse), voted against changing the card portfolio, which was referred to as a “migration” in the annual general meeting minutes. The Working Group also spoke against this in the Supervisory Committee.
Bank Austria and the Reserve Bank can get the card portfolio through their customers at a very low cost. Around 9 million euros are rumoured.
Doubt in assessment
As we ask, AVZ suspects that the expert’s assessment of the portfolio is too deep. According to industry experts, the market value of a credit card ranges from 10 to 100 euros, but this is obviously at the lower end of the scale.
Babayev is now said to have significantly reduced the purchase price for other companies. Negotiations may have started in the range of 70 to 80 million and now it is in the range of 50 to 60 million. Buyers were surveyed for five years;
Babayev is the only interested party in the live auction. His fintech has developed a processing system for credit card business. A liquidation of the company founded almost 40 years ago would be the worst-case scenario, but nobody involved wants that.
Either way, AVZ wants to stay in the company. If the sale to Babyev goes as planned, the trust will increase its stake to 27 to 28 percent.
To be on the safe side, capital measures were also decided in the general meeting. These are necessary to meet the capital requirements of the card complete Basel IV and to cover the costs of “migration”. A final meeting of shareholders is scheduled for early December.
Investments in the enterprise have stagnated, especially in the IT sector. The bank’s shareholders have deliberately spared it, employees criticize. The question is whether the business model is still viable. There are large specialist providers for infrastructure, and most banks now offer cards themselves.
The RBI explained to KURIER that they wanted to set up their own credit card offering and offer a centralized offering within the Raiffeisen banking group. Bank Austria is “examining various options to improve our product and service offering”.
