An Austrian Bank Goes Where Sanders, AOC Want the U.S. to Tread
(Bloomberg) -- In the Austrian Alps, the kind of affordable banking that Bernie Sanders and Alexandria Ocasio-Cortez envision for the U.S. is getting a vote of confidence.
While the two Democratic lawmakers are proposing that the U.S. Postal Service restart banking services to help counter payday lending, Georg Poelzl is putting actual money behind a local banking model that dates back 136 years to the Austro-Hungarian empire.
The chief executive officer of Austria’s state-owned postal service Oesterreichische Post AG is buying a bank to replace a departing partner that’s been offering financial services at many of the country’s roughly 1,800 post offices.
“Maybe it is a ‘sunset business,’ but so is our mail business, and we earn good money there, too,” Poelzl said in an interview at his office in Vienna.
Like USPS, Austria’s postal service faces the global challenge of replacing its delivery monopoly as online shopping boosts its parcel-service competitors.
Meanwhile, it runs branches nationwide, including in rural areas in a mountainous country. For Poelzl, banking is an option to get more out of his branches in a country where 20% of brick-and-mortar banks have closed since the turn of the century.
“We’re targeting customers that are no longer served by banks that are retrenching,” he said.
While USPS stopped offering banking services more than 50 years ago, the tradition has survived with varying degrees of success outside the U.S. The Austrian postal savings bank’s former headquarters, dating from 1906, is one of Vienna’s most famous Art Nouveau buildings.
Austria’s postal service sold its banking arm in 2000 to Bawag Group AG, which is bowing out by the end of 2020. It’s spending 80 million euros ($90 million) to acquire Bruell Kallmus Bank, a specialist firm it plans to turn into a traditional bank that’ll start with products such as savings, current accounts and payment services. Poelzl said he expects to generate less revenue but more profit with the new partner.
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