This would put an end to all speculations on the banker prospectively stepping down amid a significant deterioration of Erste’s financial results and amid attempts by politicians in Vienna to find a “culprit” for the tensions the Austrian banking system is facing.
According to Vienna-based media, Treichl has decided to ask for another consecutive term after consulting with his family. Heinz Kessler, head of Erste’s Supervisory Board, said he still trusts Treichl. The board is the authority that officially approves a new term.
Back in the spring of this year, representatives of Erste Group had announced that Treichl did not intend to step down after his third term ends in June 2012, but rumors emerged over the past few months in the banking sector that the architect of Erste’s strong expansion in the region in the last decade would be resigning.
However, Treichl, who will turn 60 next summer, has a very strong position within Erste, because, in addition to being CEO of Erste, he is also the largest individual shareholder, and chairman of the board of the Erste Stiftung foundation, the main shareholder of the Austrian bank.
From this position, he has in the last decade built an image as one of the strongest, visionary and charismatic Austrian bankers. Not many challenged his major bets, such as the acquisition of Romanian bank BCR in 2006 for the remarkable amount of EUR3.75 billion.
The international financial crisis that broke out in 2008 and the fact that Central and Eastern European subsidiaries turned into a source of vulnerability for Austrian banks in the eyes of analysts and investors, started to gradually erode his image. However, Treichl continued to position himself as the banker who does not hesitate to admit and comment on the errors of his own industry, who continues to denounce the huge bonuses in the industry and the excesses made in investment banking. He is also a very tough critic of politicians in any country where Erste operates.
Continuing to play the card of brave transparency, Treichl shocked the world this autumn when he announced overnight that Erste had losses of nearly EUR1 billion nine months into the year and that it would remain in the red the entire year. In addition, BCR, his big bet, also reported losses in 3Q.
Since very technical aspects are involved, explaining this turn of tables in the group’s financial situation proved difficult, then the general context in the euro zone enhanced the nervousness generated by the announcement, and finally a communication blunder made Andreas Treichl the target of dishonoring accusations such as stock market manipulation and faulty bookkeeping.
Some politicians even took advantage of these circumstances to accuse him of manipulating the bank’s balance sheet to justify his own EUR1.3 billion bonus for 2010.
Banking sources say this situation affected Treichl, who even had to announce he was giving back a third of the bonus.
Last week, the Austrian Financial Market Authority dropped the investigation on suspicions of market manipulation. The banker told Reuters on September 29 that he stood by his profit forecast for 2011, but two weeks later he announced Erste could end the year with EUR800 million losses.
Treichl said the confusion stemmed from the fact that the German language version of the story published by Reuters specified that he was talking about operating profit, but the English version did not.
He also says Erste had not made net profit forecasts in the last three years because of financial market turmoil, so had not done so this time, either.
It remains to be seen what conclusion the Financial Market Authority will reach on this matter.
(English version by Daniela Stoican)