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1. Company Snapshot

1.a. Company Description

BAWAG Group AG operates as a holding company for BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft that provides various banking products and services in Austria, Western Europe, North America, and internationally.The company's Retail & SME segment offers savings, payments, cards, lending, investment, and insurance products and services; small business lending; factoring and leasing business; social housing activities; and real estate leasing platforms.Its Corporates & Public segment provides lending products to international corporates; international real estate financing; corporate, mid-cap, and public lending; and other financial services.


The company's Treasury segment offers trading and investment services, such as asset-liability management transactions, including secured and unsecured funding.The company is headquartered in Vienna, Austria.

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1.b. Last Insights on BG

BAWAG Group AG's recent performance was driven by strong operating results, with Q3 2025 net profit reaching €219 million and RoTCE of 27.8%. The company's pre-provision profits stood at €354 million, with a cost-income ratio of 36.1%. The solid performance puts BAWAG on track to exceed 2025 targets. A CET1 ratio of 14.1% also underscores the company's robust capital position. Additionally, BAWAG's dividend appeal comes into focus amid the European market's mixed signals, offering investors a stable income stream.

1.c. Company Highlights

2. BAWAG Group's Strong FY 2025 Results: A Record Net Profit and Ambitious Growth Targets

BAWAG Group reported a record net profit of EUR 860 million for FY 2025, with earnings per share of EUR 10.87 and a return on tangible common equity of 27%. The company's underlying operating performance was strong, with pre-provision profits up 31% year-over-year and a cost-to-income ratio of 36%. The actual EPS came in at EUR 2.65, slightly below estimates of EUR 2.73. The company's net interest income and net commission income contributed to its strong revenue growth, with core revenues up 3% versus the prior quarter.

Publication Date: Feb -14

📋 Highlights
  • Record Net Profit:: 2025 net profit reached EUR 860 million, with a 27% return on tangible common equity and EPS of EUR 10.87.
  • Strong Operating Performance:: Pre-provision profits rose 31% YoY, supported by a 36% cost-to-income ratio, and NPL ratio held at 80 basis points.
  • Shareholder Returns:: EUR 607 million distributed in dividends and buybacks, reducing shares outstanding by 2% to 77 million since 2017 IPO.
  • Future Growth Targets:: Projects net profit CAGR of 12% (EUR 960M in 2026, EUR 1.2B in 2028) and EUR 1.5 billion excess capital by 2028 for M&A or distributions.
  • Liquidity & Capital Strength:: Maintains EUR 14 billion cash (19% of balance sheet), CET1 target of 12.5%, and 12.5% ROE guidance through 2028.

Financial Performance and Guidance

The company has provided ambitious guidance for the next three years, targeting net profit of over EUR 960 million in 2026, over EUR 1.1 billion in 2027, and over EUR 1.2 billion in 2028, excluding acquisitions. This translates to a net profit CAGR of 12% over the next three years. As Enver Sirucic, CFO, noted, "Top line growth will come from 3% to 4% annual loan growth, a higher asset margin, and positive effects from deposit hedge roll-off."

Valuation and Dividend Yield

BAWAG Group's current P/TBV ratio stands at 2.49, indicating a premium to its book value. The company's dividend yield is 4.2%, which is attractive for income investors. With a strong capital position and a CET1 target of 12.5%, BAWAG Group is well-positioned to return excess capital to shareholders through dividends and share buybacks.

Growth Initiatives and Risk Management

The company is focusing on building a pan-European and U.S. banking group, with a strong leadership team and a deep bench of leaders. BAWAG Group has transformed from a branch-heavy business to a digital-first bank, with a high-quality advisory branch network. The company is also investing in AI initiatives and redesigning processes through simplification, basic workflow automation, and AI. With a conservative balance sheet and a focus on risk-adjusted returns, BAWAG Group is well-positioned for future growth, both organic and inorganic.

Outlook and Conclusion

BAWAG Group's strong FY 2025 results and ambitious growth targets suggest that the company is on track to deliver long-term value to shareholders. With a solid capital position, a strong leadership team, and a focus on risk management, the company is well-positioned to navigate the challenges and opportunities in the banking industry.

3. NewsRoom

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Nov -04

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BAWAG Group publishes Q3 2025 results: Net profit €219 million and RoTCE 27.8%; on track to exceed 2025 targets

Oct -22

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Sep -24

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Jul -31

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BAWAG Group publishes Q2 2025 results: Net profit € 210 million and RoTCE 27.6%, full year outlook reconfirmed

Jul -23

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May -27

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BAWAG Group: Moody’s affirms ratings and changes outlook from stable to positive

May -21

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May -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.86%)

6. Segments

Retail & SME

Expected Growth: 4.77%

The 4.77% growth in Retail & SME segment of BAWAG Group AG is driven by increasing demand for consumer loans, mortgages, and credit cards. Strong brand recognition, expanded digital channels, and competitive pricing also contribute to growth. Additionally, the segment benefits from a stable Austrian economy, low unemployment, and rising consumer confidence.

Corporates, Real Estate & Public Sector

Expected Growth: 4.85%

BAWAG Group AG's 4.85% growth is driven by Corporates' increased lending to Austrian SMEs, Real Estate's robust mortgage business, and Public Sector's strong demand for infrastructure financing. Additionally, the group's digitalization efforts, cost discipline, and solid asset quality contribute to its growth momentum.

Treasury

Expected Growth: 6.47%

BAWAG Group AG's Treasury segment growth of 6.47% is driven by a strong liquidity position, effective asset liability management, and a favorable interest rate environment. Additionally, the segment benefits from a diversified funding base, a solid risk management framework, and a focus on cost efficiency, enabling the bank to optimize its balance sheet and generate sustainable earnings.

Corporate Center

Expected Growth: 5.83%

BAWAG Group AG's Corporate Center segment growth of 5.83% is driven by strategic cost management, efficient capital allocation, and a strong focus on digitalization. Additionally, the segment benefits from a solid risk management framework, enabling the company to navigate market volatility. Furthermore, the center's efforts to optimize processes and streamline operations have contributed to the growth.

7. Detailed Products

Retail Banking

BAWAG Group AG offers a range of retail banking services, including current and savings accounts, credit cards, personal loans, and mortgages.

Corporate Banking

BAWAG Group AG provides corporate banking services, including cash management, trade finance, and lending solutions, to support businesses of all sizes.

Investment and Markets

BAWAG Group AG provides investment and market-related services, including asset management, brokerage, and research, to help clients achieve their investment goals.

Leasing

BAWAG Group AG offers leasing services for vehicles, equipment, and real estate, providing flexible financing solutions for businesses and individuals.

Factoring

BAWAG Group AG provides factoring services, allowing businesses to optimize their working capital and improve cash flow.

8. BAWAG Group AG's Porter Forces

Forces Ranking

Threat Of Substitutes

BAWAG Group AG operates in a highly competitive market, and customers have various alternatives to choose from. However, the company's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

BAWAG Group AG's customers have significant bargaining power due to the availability of alternative banking services. The company needs to maintain competitive pricing and services to retain customers.

Bargaining Power Of Suppliers

BAWAG Group AG has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power in supplier relationships.

Threat Of New Entrants

While there are barriers to entry in the banking industry, new entrants can still disrupt the market. BAWAG Group AG needs to maintain its competitive edge through innovation and customer-centric services.

Intensity Of Rivalry

The Austrian banking industry is highly competitive, with several major players vying for market share. BAWAG Group AG needs to differentiate itself through its services and customer experience to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.29%
Debt Cost 4.42%
Equity Weight 20.71%
Equity Cost 9.43%
WACC 5.46%
Leverage 382.79%

11. Quality Control: BAWAG Group AG passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

125.4$

Current Price

125.4$

Potential

-0.00%

Expected Cash-Flows