Fred Crawley talks to
Alexander Schidecker, CEO of Austrian lessor BAWAFG PSK Leasing,
about returning from the Eastern front, and what the future holds
for Austria’s leasing industry.
Alexander Schmidecker is finally
getting back to the sharp end of his business. Although the 43
year-old from Vienna has been swamped with strategic meetings since
he became chief executive of BAWAG PSK Leasing (BPL) on 1 February,
he is at last finding some time to engage with prospective
When Leasing Life caught up with him,
he was fresh out of a meeting with clients that had become “more
complicated than expected”, and overran by nearly an hour – but he
doesn’t sound exhausted or rushed in the slightest. After all, this
is the sort of face-to-face work he has always preferred to do.
Schmidecker’s leasing career developed hot on
the heels of Austria’s banking market as it expanded eastward in
the 1990s, starting with a position at Creditanstalt Leasing in
“The Austrian banking market was never very
big,” he reflects, “but I suppose you could say it gained a lot of
‘sex appeal’ during and after the Velvet Revolution in Eastern
Europe. Our banks had managed specific import and export agreements
through those countries during the communist era, and so grew up
quickly out of a small country to become medium-sized European
players, and the leasing companies followed.”
Things moved quickly. When Schmidecker joined
Creditanstalt, it had already been operating cross-border leasing
with Czechoslovakia and Hungary since the fall of Soviet rule, and
had run a Czechoslovakian subsidiary since 1991. Now the bank was
pushing its leasing network deep into the CEE region, and
Schmidecker, with a background in management consultancy, was
present for a lot of tough strategic decisions.
Schmidecker says that this constant testing of
markets was difficult going – “a case of two steps ahead, and
one-and-a-half back” – but that constant refinement through
experiencing problems allowed business models to be more
successfully transplanted into new countries.
One of the toughest, and most enjoyable, times
for Schmidecker was his tenure as CEO of Creditanstalt subsidiary
CAC Leasing in Slovakia – a role that required an extremely
entrepreneurial management style due to the nation’s volatile legal
and tax climate. With no senior leasing professionals in the state,
Schmidecker relied on enthusiastic but inexperienced graduates to
staff CAC, growing it to 160 staff and 30,000 contracts in just
But the expansion of Austrian banking had
another consequence – an extremely active M&A climate.
Creditanstalt was bought by Bank Austria in 1997, which was in turn
subsumed into German banking group HVB by the time the merger was
complete in 2002. To top things off, HVB was swallowed up by
Italy’s UniCredit in 2005.
Schmidecker returned to a multinational CEO
role in Vienna, and by the time the merger was complete, he was at
the helm of a 14-nation, 1,500-person colossus that turned over €3
billion a year in new business, and which filled his working life
with high-level bureaucratic tasks, leaving little time for meeting
with clients and partners.
As 2008 drew to a close, he realised it was
time to leave: “I decided that the culture shift I had experienced
didn’t really fit my expectations. I had enjoyed a very
entrepreneurial management position with Bank Austria Creditanstalt
for 15 years, but things had grown to the point where the work was
much more administrative.”
Hence the move to the leasing arm of BAWAG
PSK, which operates a portfolio of around 70,000 contracts in
Austria. Although BAWAG PSK sold off its CEE banking subsidiaries
in 2008 after being bought by US equity group Cerberus in 2007, it
kept a small leasing network throughout Poland, the Czech Republic,
Hungary and Slovakia.
With only 200 staff to manage, and these small
CEE portfolios, BPL has provided Schmidecker with a management
prospect that puts him “closer to the business”, in his words.
Better yet – and virtually uniquely for an Austrian banking and
leasing network – all back office work is centralised in Vienna,
meaning that CEE business is approached directly rather than
through separate organisations.
Schmidecker has matched this new opportunity
for hands-on management with a flurry of strategic thinking. He
expects that BPL will post a profit in the single-digit euro
million range for 2008, but aims to build this to a double-digit
figure within the next two to three years, in order to achieve a 15
percent return on equity.
To do this he intends to strengthen BPL’s
equipment leasing portfolio (which currently makes up roughly 25
percent of the lessor’s loan book), with an emphasis on mid-ticket
production machinery, as well as courting clients from the
downturn-resistant pharmaceutical and food processing sectors.
Also on the agenda is a focus on sales
channels, involving renewed emphasis on bank branch selling, and a
pursuit of vendor partnerships with larger companies in the
industrial sector. Additionally, he says, BPL will be looking into
syndication with other banks and leasing companies on deals in the
€10 million to €30 million range – a trend which has not been seen
in Austria for a long time.
The end of the post-Soviet boom has put a stop
to Austrian lessors’ eastward expansion, while significant
structural challenges face them in their home market. Nevertheless,
one gets the feeling from talking to Schmidecker that, despite the
difficulty, this is the job he has been waiting years to do.