World Champion Austria Banks
The invisible hand and lifeblood of the economy Businesses need capital to keep running. Austria’s banks play a responsible role.
T
he economy doesn’t work without money – and supplying the economy with its lifeblood is the banks’ main task. There is hardly a company that can keep its operations afloat without a financial cushion. Banks take care of providing this capital, often without the general public really being aware of it. They serve as an invisible hand, so to speak, that gets everything started and then up and running. A tremendously important job for the economy.
During the corona crisis this became clear like never before with people needing their cash supply. In Austria you can get your cash from about 9,000 cash machines as well as from cash registers in retail stores and petrol stations. This extensive infrastructure paid off during the corona crisis as the public cash flow was never in danger. Austria has a tight network of bank branches, in fact one of the tightest in Europe with about 600 financial institutes and 3,600 branches.
Photo: Erste Bank Österreich
Economy and banks “Banks are only doing well if the businesses and the economy are doing well,” says Robert Zadrazil, banker and President of the Association of Austrian Banks. “All Austrian banks are doing their best to help their customers through these hard times. And they are in a good position to do so, as Austrian banks are equipped with sufficient capital and liquidity. This is the significant difference to the financial crisis of 2008. Back then, the capital market was part of the problem. During the Covid crisis 2020 banks and other financial institutions are part of the solution.”
“We are trying to process bridging loans, deferrals and state aids as quickly as possible and to keep the effects of the crisis for businesses as low as possible.” Peter Bosek, CEO of Erste Bank
Globally leading system The Austrian banking system is running smoothly and is considered one of the best and most secure in the world. And the figures are backing this up. Not necessarily in terms of absolute numbers – due to its population Austria is hardly a giant – but when you look at the percentual development. In 2019, corporate loans rose by an impressive 6.2 percent to 163.4 billion euros. Private loans went up by 4.2 percent to 168.8 billion euros. At the same time, the deposits of businesses at Austrian banks increased by 5.2 percent to a new all-time high of 70.9 billion euros. Saving is obviously still in fashion, in Austria.
