4
The integration of Bank Austria Creditanstalt in UniCredit Group is a logical step in the context of a long-term development. The changes in the market environment – the opening up of the market, the Single European Market, EU enlargement, the developments in the banking sector, deregulation, concentration – go hand in hand with
BA-CA’s own corporate history – mergers in Austria, elevation to the international dimension, creation of a bank of a European dimension. BA-CA has always been on the cutting edge of this process of inevitable change.
- The merger and integration to form Austria’s leading bank at the end of 1997 and in the subsequent years took place with the intention of creating a first-class Austrian bank. The bank was conceived to be competitive by EU standards while playing an international role in accompanying internationally active corporate customers. The merger that took place in Austria was a success story similar to the bank’s operations in CEE. This led to modernisation and, most particularly, to capital market orientation.
- The deepening of the Single European Market and the upturn experienced by the CEE countries after the successful system transformation presented new challenges from the end of the 1990s: the bank was confronted with new dimensions in terms of capital resources and assumption of risk. Sustainable organic growth moreover required the bank to exceed market share thresholds to become a bank with future potential. At the same time, the bank was under pressure from the capital market to produce good results. This prompted the integration with HVB: it doubled the number of business units in CEE to create the largest network, and the new group became the leading bank in some countries. The mergers unlocked substantial synergies in CEE business. This provided BA-CA with the basis for growth, which was supported by the IPO in mid-2003 making the growth process visible.
- On account of these developments which have taken place in the last nine to ten years, the bank is today confronted with an entirely new environment, even if this is not always recognised or acknowledged. This is true on three counts: the EU Single Market and related rules and regulations are being adopted by a growing number of countries. The economies of the first round of enlargement are integrated in the Single Market, the EU’s enlargement in 2007 and the accession candidates are again changing the economic and geographical horizon. And new economies with enormous growth potential, countries covering large areas, have also applied for membership of the EU. This will considerably rejuvenate the growth cycle throughout Europe.
The process of economic integration has created new conditions. Industry and service providers are producing goods and creating plans without regard for national borders. They are taking advantage of the opportunities offered by the Single Market to an extent that is already discernible.
And the banking sector... is lagging behind. The Single Financial Market, conceived as counterpart, as an infrastructure for the economy of the Single Market, is – aside from the major financial centres and trade and investment banking – still fragmented. Value creation which is required by the capital market is almost impossible to achieve by banks operating on their own in their respective countries.
- Under these conditions, UniCredit Group appeared on the market as the first truly European bank at just the right time.