From scandal to pandemic, Austria’s economy has had a long year.
Last summer, a financial scandal threatened to upend the rock-solid foundations of Austrian corporate finance. Authorities discovered that Martin Pucher, CEO of Commerzialbank Mattersburg, a regional bank in an eastern state, had been systematically falsifying the bank’s accounts for more than a decade. Over half the bank’s declared assets were pure fiction, and companies and cooperatives may lose over €100 million ($122 million) in uninsured deposits. Commerzialbank’s fall came after the closure of another significant player, Anglo Austrian AAB Bank, in a flurry of money-laundering allegations.
Banks are the principal source of external funding for Austrian corporates, in line with other EU countries, including Germany. Yet when the dust settled, treasurers could exhale a sigh of relief; funding conditions for corporates in the Alpine nation were not impacted, and lending rates continued their long march to ever-lower levels.
All the work banks had undertaken over the prior decade to improve levels of capitalization, profitability and resilience had paid