Financial innovation: Ex-crisis bank Hypo Alpe Adria turns the kiosk into a bank

Tobacco sign in Vienna

Cooperation with the financial sector.

(Photo: Leonhard Foeger)

Frankfurt The tobacco shop is an Austrian institution that has only inadequately translated into German with a kiosk. Around a million customers visit the small shops every day, in which, in addition to tobacco products, newspapers and magazines and many other everyday goods are sold.

Even in the tough Corona lockdowns, the tobacco shops remained open due to their classification as systemically relevant local suppliers. Now the Austrian Anadi Bank wants to use Austria’s tobacco shops to win new customers.

The money house has started a cooperation with tobacconists under the “Marie” brand. Using tablet computers installed in the shops that are directly connected to the bank’s systems, customers can open accounts, deposit and withdraw money and also apply for consumer loans.

The project is part of the bank’s attempt to reinvent itself. Under its old name Hypo Alpe Adria, the money house gained notoriety during the great financial crisis. In 2007 BayernLB took over the bank from the federal state of Carinthia, and two years later the German Landesbank had to return the now ailing bank to Austria in an emergency.

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The bank had speculated on a daring expansion course in the Balkans. After it was returned to Austria, there was a long-term legal dispute over the distribution of the billions from the near-collapse of Hypo Alpe Adria.

At the end of 2013, a group of Indian-British investors led by Sanjeev Kanoria took over the Austrian remnants of Hypo Alpe Adria. Anadi is the name of the holding company through which the Kanoria family bought the bank.

Christian Kubitschek has been running the Austrian Anadi Bank since last July. He sees 2021 as the year of change: “We completed the renovation last summer, now the growth phase has begun.”

The former crisis bank has gone through tough restructuring. In 2020, the balance sheet of the Carinthian successor institute shrank from 3.1 to 2.6 billion euros. After a loss of 19 million euros in 2019, Austrian Anadi Bank posted a profit of two million euros in the following year. The equity ratio totaled 15.2 percent and the number of employees fell from 314 to 280.

Growth is more important than profit

For 2021, Kubitschek actually planned with a black zero in the result. Now the CEO says: “The result is expected to be 200 to 300 percent above this target.” In the past year, income rose by ten percent and costs fell by 30 percent. Despite the higher than expected profits, the manager emphasizes: “At the moment, we are not interested in optimizing the return on equity, but in growth.”

Kubitschek differentiates between the traditional part of the bank and the fintech activities, which also include the tobacco shop project. “For ‘Marie’ we only needed six months from the idea to implementation,” says Alp Dalkilic, the board member responsible for the fintech area. Within three months, the bank was able to win 100 tobacconists as partners.

Kubitschek wants to use the profits from the traditional bank to finance the expansion of the fintech segment. Kubitschek hopes that this area will break even in one to two years.

By 2023, the digital loan book is expected to grow from currently around 50 million euros to 200 million, of which just under 100 million euros will come from Germany. In 2020, Anadi started granting consumer loans in Germany, with consumer loans to follow in 2022.

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