Nov. 8 (Bloomberg) -- Bawag PSK Bank, the Austrian lender controlled by Cerberus Capital Management LP, expects to meet last year’s profit, according to Chief Executive Officer Byron Haynes.
“We are on track to be profitable, we are on track to be in line with our 2010 net profit, excluding the bank levy, and therefore on track to meet our obligations including payment of participation capital,” Haynes told reporters in Vienna late yesterday.
The CEO previously said he aimed to exceed last year’s profit in 2011 as higher revenue and lower bad debt charges will offset a decline in trading income.
Cerberus bought Bawag for 3.2 billion euros ($4.4 billion) in 2006 after the bank almost collapsed. Three years later, the lender received 550 million euros in state capital under Austria’s bank stabilization program, while Cerberus injected 205 million euros. The New York-based private-equity firm hasn’t received any dividend payment since it bought the bank, and Bawag isn’t allowed to pay any until at least 2012, while it holds the state capital. Bawag last year returned to profit for the first time since 2006, reporting net income of 121.8 million euros.
“We continue to have strong liquidity and this is despite the strong competition for liquidity particularly over the past four months,” the CEO said, adding the bank doesn’t require access to the capital markets so “the fact that the capital markets have been try or tried up is not an issue for us.”
While Bawag has completed preparations to launch a benchmark mortgage covered bond, “at this point in time we have no intention to issue, but we want to make sure we have the plugs to do so,” Haynes said.
To contact the reporter on this story: Zoe Schneeweiss in Vienna at firstname.lastname@example.org
To contact the editor responsible for this story: Angela Cullen at email@example.com