November 16, 2017 / 8:07 AM / a year ago

Austrian bank BAWAG reports record third-quarter profit

VIENNA (Reuters) - Austria’s BAWAG (BAWG.VI), the former trade union bank owned by U.S. private equity firm Cerberus until its listing last month, posted its highest ever third-quarter pretax profit on Thursday, driven mainly by higher core revenues.

BAWAG carried out Austria’s biggest ever initial public offering last month, raising 1.9 billion euros, in which Cerberus Capital Management sold down its stake to roughly 35 percent from 53 percent. GoldenTree Asset Management also reduced its stake to around 26 percent from 39 percent.

Unlike larger Austrian lenders Raiffeisen Bank International (RBIV.VI) and Erste Group (ERST.VI), BAWAG has turned its back on eastern Europe and instead focused on Germany, Austria and Switzerland, part of Cerberus’s bet on German-speaking countries that has seen it take a stake in Deutsche Bank (DBKGn.DE).

A range of recent bolt-on acquisitions helped BAWAG boost its net interest income by 12.4 percent in the three months through September compared with a year earlier while operating expenses remained flat.

The bank said profit before tax rose 7.9 percent to 131.8 million euros (117.86 million pounds) compared with the same period a year earlier. That brought the nine-month total for this year to 382.4 million euros.

BAWAG repeated its outlook for 2017, including pretax profit of more than 500 million euros. The bank is hoarding capital to fund possible acquisitions, mainly in Germany, but it stuck to broad guidance that it is “pursuing several opportunities” with balance sheets of up to around 10 billion euros.

Reporting by Francois Murphy; Editing by Mark Potter and Jane Merriman

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