Financial sector – growth spurt for the Post bank subsidiary

It was a big surprise when the Dutch financial giant ING announced in the spring that it wanted to give up its private customer business in Austria this year. Hundreds of employees of the online part of the business feared for their jobs. But now they can breathe a sigh of relief, because in the future they will be employed by the Österreichische Post AG group. Swiss Post has been represented on the market with its own bank, “bank99”, since April 2020. And this will take over ING’s Austrian private customer business as soon as the authorities give the green light. “It is planned that all 270 employees will be taken over,” said a Post spokeswoman on Tuesday.

For Georg Pölzl, the general director of the state post, the deal, which was sealed late on Monday evening, is an “extraordinary step towards accelerating the ramp-up of our financial services,” as he emphasized in a press release. The new banking subsidiary of the Post recently had around 70,000 customers, but through ING’s local private customer business, it will have around 150,000 customers in one fell swoop and thus have three times as many customers as now – a “strong growth spurt” in Pölzl’s words.

Balance sheet total jumps to 2.3 billion euros

In addition to the customer base, the total assets of “bank99”, 80 percent of which belongs to the Post and 20 percent to the financial group of Grazer Wechselseiten, will increase significantly. While it was only 603 million euros at the end of 2020, it will be a good 2.3 billion euros after the merger.

Of the approximately 150,000 private customers who are taken over as a package, according to reports, about a third has ING as their house bank. The takeover primarily affects current accounts, consumer and mortgage loans and securities investments.

However, it does not include pure savings customers, on whom ING has placed particular emphasis in the past, but who have turned into a losing business due to the low interest rate environment. According to a spokeswoman for the financial group, the last pure savings customer, who otherwise had no other product at ING, was adopted in the middle of the year. For many of these 400,000 or so customers, the ING savings account was a secondary account.

“No price in the traditional sense”

No money will flow to the Dutch financial group when it “sells” its Austrian private customer division – probably not because this residual business is also in deficit. “There is no price in the traditional sense,” it said on Tuesday from the post office. However, since it is apparently necessary to plug a loss-related capital hole after the takeover has been completed, the Post Office will inject around 100 million euros in fresh money into its subsidiary bank. For “bank99”, which is still in the red, Post boss Pölzl expects a balanced result within three years.

The approval of the supervisory and competition authorities for the takeover is expected for the end of 2021. Technically, it should be completed by mid-2022, as was further learned from Post and ING. After all, transferring the ING digital platform in Austria to the IT system of the Post is considered a “highly complex undertaking”. Two brands should become one.

It is still unclear whether something relevant will change for ING customers at “bank99” (many have a free account, for example). Swiss Post does not want to say anything specific at the moment – just this much: “We want to see that we get the best out of both worlds,” said a press spokeswoman. “Our goal is to keep as many customers as possible.” In any case, the plan is to “strengthen online competence and also provide new customers with a range of branches”. Most recently, there were almost 1,800 business outlets across Austria through the Post and its partners.

ING focuses on corporate customers in Austria

However, ING does not want to turn its back entirely on Austria after entering the market 18 years ago. In the future, she would like to concentrate exclusively on the more profitable business with corporate customers. 14 employees are currently employed in this area in Vienna.

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