Annual Report 2019

Foreword by the President

Ladies and gentlemen,

In 2019, the difficult global macroeconomic environment resulting from mounting trade tensions between the U.S.A. and China and several Brexit extensions weighed on economic activity in the euro area. In addition, the faltering German economy had an impact on neighboring countries, including Austria. The reporting year also saw climate change take center stage in the policy debate and new leaders take over at the European Commission, the ECB and the IMF.

In this challenging overall environment, Austria’s economy proved competitive and robust, with Austria’s GDP growth mildly outperforming the euro area average. Amid dwindling global demand, growth will weaken slightly in 2020, but, according to recent forecasts, it will pick up speed again in the coming years.

For the Oesterreichische Nationalbank (OeNB), the year 2019 was all about change. In September 2019, the Eurosystem adopted another package of expansionary monetary policy measures to be implemented by the national central banks. A review of the Eurosystem’s monetary policy strategy was first discussed in 2019 and will intensify in 2020 under the auspices of the new President of the ECB. Discussions will also focus on central bank digital currency (CBDC) and on how to consider “green finance” in monetary policy while maintaining both price and financial stability.

In banking supervision, emphasis was put on strengthening banks’ long-lasting resilience, ensuring sustainable lending, tackling digitalization and IT risks as well as implementing the finalized Basel III reform package. Some ten years after the financial crisis, the banking system is robust and healthy. Austria’s present banking supervisory setup and financial market received an outstanding rating under the Financial Sector Assessment Program (FSAP) conducted by the IMF in 2019. Concluding a joint Memorandum of Understanding, the OeNB and the Austrian Financial Market Authority (FMA) optimized their cooperation and laid down the supervisory objectives for 2020. Financial intermediaries will need to adopt methods to effectively manage climate change-­related financial risks. The OeNB will also continue monitoring the fintech ecosystem, i.e. technology-driven innovations in financial services.

In 2019, the OeNB achieved another solid operating profit thanks to its investment strategy, which relied on stepped-up diversification and risk reduction measures given the difficult market conditions. The new EUR 100 and EUR 200 banknotes went into circulation in the reporting year; EUR 500 banknotes, by contrast, were no longer issued.

Between May and September 2019, four new members of the OeNB’s Governing Board took the baton from their predecessors. The reassignment of duties within the Governing Board reflects the core competencies of the four executive directorates and increases the OeNB’s efficiency. It took effect on January 1, 2020. The work begun in 2019 to deliver a new strategy for the OeNB will be completed in the course of 2020. In 2020, Austria celebrates 25 years of EU membership. Public opinion of EU membership is high according to recent surveys, and, at some 80%, satisfaction with the euro is even higher.

In closing, let me express my gratitude to the entire staff of the OeNB and of the OeNB’s subsidiaries as well as to the members of the Governing Board and of the General Council of the OeNB for their excellent and productive cooperation in 2019.

Vienna, March 2020

Harald Mahrer, President

Foreword by the Governor

Ladies and gentlemen,

The euro area economy continued to slow down in 2019 amid difficult global economic conditions. Real GDP growth in the euro area, which amounted to a mere 1.2% in 2019, was mainly driven by domestic demand. On top of that, the price stability target of keeping inflation “below, but close to, 2%” seemed out of reach in the reporting year. Following detailed ­discussions of the pros and cons, the Governing Council of the ECB therefore adopted a comprehensive ­package of measures in September 2019, thus maintaining a course of highly accommodative ­monetary policy. The new measures are meant to provide significant stimuli to ensure favorable financing conditions, which will, in turn, fuel euro area growth and help meet the price stability objective. Taking note of concerns about ­possible undesirable side effects of its nonstandard monetary policy measures, the Governing ­Council of the ECB keeps monitoring developments on this front.

In early 2020, the Eurosystem launched a review of its monetary policy strategy that will focus on the price stability objective and is expected to be concluded by the end of the year. Not only will the Euro­system review the effectiveness and the potential side effects of the monetary policy toolkit developed over the past decade, but it will also include other considerations, such as financial stability, employment and environmental sustainability as well as communication practices, in this exercise. Guided by the principles of thorough analysis and open minds, the Eurosystem will engage in an intensive dialogue with all stakeholders and the general public. The OeNB will take an active role in this review process to ensure that the Eurosystem’s future monetary policy strategy adequately reflects structural economic shifts.

Austrian banks managed to record a consolidated end-of-period profit of EUR 5.3 billion in September 2019, even though they were faced with growing risks last year. Moreover, Austrian banks’ ratio of nonperforming loans and capitalization have improved. This notwithstanding, banks will have to adjust their business models to master the huge structural challenges the banking sector has come up against.

Following the reassignment of management duties within the Governing Board, which took effect on January 1, 2020, the OeNB has, under its new senior management, started to formulate its new strategy for the years ahead. The new strategy will center on the following horizontal issues: financial innovation, financial education, financial market strategy, communication and sustainable human resources management. In parallel, the OeNB will define the strategic orientation of its individual business areas with a view to ­future-proofing and innovating the ways in which it fulfills its tasks.

To conclude, I would like to thank all OeNB employees, the President and Vice President, the General Council as well as the other members of the Governing Board for their trust and excellent cooperation in the past few months.

Vienna, March 2020

Robert Holzmann, Governor

The General Council of the OeNB comprised the following members on December 31, 2019

Harald Mahrer


Term of office:

September 1, 2018, to
August 31, 2023

Barbara Kolm

Vice President

Term of office:

September 1, 2018, to
August 31, 2023

Bettina Glatz-Kremsner

Director General of
Casinos Austria AG and of Österreichische Lotterien Ges.m.b.H.

Term of office:
March 1, 2018, to
February 28, 2023

Stephan Koren

Chairman of Wüstenrot Wohnungswirtschaft reg. Gen.m.b.H.

Term of office:
September 8, 2018, to
September 7, 2023

Franz Maurer

Partner at LIVIA Group

Term of office:

May 23, 2018, to
May 22, 2023

Walter Rothensteiner

Chairman of the Austrian Raiffeisen Association

Term of office:

August 1, 2019, to
July 31, 2024

Peter Sidlo

Term of office:

March 1, 2018, to
February 28, 2023

Christoph Traunig

Executive Partner of
St. Stephan Capital Partners

Term of office:

September 1, 2018, to
August 31, 2023

Harald Waiglein

State Commissioner

Director General,

Directorate General Economic Policy and Financial Markets,

Federal Ministry of Finance

Term of office:

from July 1, 2012

Alfred Lejsek

Deputy State Commissioner


Directorate Financial Markets,

Federal Ministry of Finance

Term of office:

from April 1, 2016

Birgit Sauerzopf

Central Staff Council


Christian Schrödinger

Central Staff Council

Deputy Chair

The OeNB’s ownership structure and decision-­making bodies

The OeNB’s owner

The OeNB is a stock corporation. However, given its particular status as a central bank, it is governed by a number of special provisions laid down in the Federal Act on the Oesterreichische Nationalbank 1984 (Nationalbank Act). Its nominal capital of EUR 12 million has been held in its entirety by the central government since July 2010.

Functions of the General Council

The General Council is charged with the supervision of all business not falling within the ­remit of the European System of Central Banks (ESCB). The General Council is convened by the President, as a rule once a month (Article 28 paragraph 1 Nationalbank Act). Pursuant to Article 20 paragraph 2 Nationalbank Act, the General Council shall advise the Governing Board in the conduct of the OeNB’s business and in matters of monetary policy. Joint meetings of the General Council and the Governing Board must take place at least once every quarter. General Council approval is required for a number of management decisions, e.g. for starting and discontinuing business lines, establishing and closing down branch offices, and acquiring and selling equity interests and real property.

Also, the General Council must approve ­appointments of members of supervisory boards and executive bodies of companies in which the OeNB is a shareholder. Appointments of the second executive tier of the OeNB itself must likewise be approved by the General Council. Finally, the General Council has the exclusive right of decision on issues detailed in Article 21 paragraph 2 Nationalbank Act, e.g. on submitting to the Austrian federal government nominations of three candidates for appointments to the OeNB’s Governing Board by the Federal President, on defining general operational principles for all matters outside the remit of the ESCB, on approving the financial statements for submission to the General Meeting, and on approving the cost account and investment plan for the next financial year.

Composition of the General Council

The General Council consists of the President, the Vice President and eight other members (Article 22 paragraph 1 Nationalbank Act). On December 31, 2019, two positions on the General Council were vacant. Only Austrian citizens may be members of the General Council. General Council members are appointed by the federal government for a term of five years and may be reappointed. Further provisions pertaining to the General Council are set out in Articles 20 through 30 of the Nationalbank Act.

Personnel changes of the General ­Council (between January 1, 2019, ­
and March 5, 2020)

Gabriele Payr resigned from her mandate as General Council member (term of office from August 1, 2014, to July 31, 2019) with effect from end-February 2019. This mandate has not been filled to date.

Having been appointed Vice Governor of the Oesterreichische Nationalbank with effect from July 11, 2019, Gottfried Haber resigned from his mandate as General Council member (term of office from May 23, 2018, to May 22, 2023) with effect from July 10, 2019. This mandate has not been filled to date either.

On July 10, 2019, the federal government decided to reappoint Walter Rothensteiner General Council member with effect from ­August 1, 2019, for a period of five years (term of office from August 1, 2019, to July 31, 2024). On January 15, 2020, Walter Rothensteiner ­resigned from his mandate as General Council member with effect from end-January 2020. This mandate has not been filled to date.

At the meeting of the Central Staff Council of October 10, 2019, Birgit Sauerzopf was elected Chair of the Central Staff Council. Birgit Sauer­zopf replaced Robert Kocmich, who retired with effect from October 1, 2019, as representative delegated to the General Council by the Staff Council (pursuant to Article 22 paragraph 5 Nationalbank Act). Furthermore, at the meeting of the Central Staff Council of October 10, 2019, Christian Schrödinger was elected Deputy Chair of the Central Staff Council. Christian Schrödinger replaced Birgit Sauerzopf as alternate representative delegated to the General Council by the Staff Council (pursuant to Article 22 paragraph 5 Nationalbank Act).

Governing Board

The Governing Board is responsible for the overall running of the OeNB and for conducting the OeNB’s business. In pursuing the objectives and tasks of the ESCB, the Governing Board acts in accordance with the guidelines and instructions of the ECB. The Governing Board conducts the OeNB’s business in a way that enables the OeNB to fulfill the tasks conferred upon it under the Treaty on the Functioning of the European Union (TFEU), the Statute of the ESCB and of the ECB, directly applicable EU legislation adopted thereunder, and by federal legislation.

The Governing Board is composed of the Governor, the Vice Governor and two other members, all of whom are appointed by the Federal President acting on a proposal from the federal government. Each appointment is made for a term of six years. Persons holding office may be reappointed. The Governor of the OeNB is a member of both the Governing Council and the General Council of the ECB. In this capacity, the Governor and his representative are not bound by the decisions of the OeNB’s Governing Board or those of the OeNB’s General Council, nor are they subject to any other instructions.

Further provisions pertaining to the Governing Board are set out in Articles 32 through 36 of the Nationalbank Act. See www.oenb.at for additional information about the Governing Board of the OeNB.

Changes to the Governing Board of the OeNB

The new members of the Governing Board of the OeNB took office over the course of 2019. Based on the federal government’s proposal, the Federal President of Austria, Alexander Van der Bellen, had appointed them for a term of six years each in February 2019. On May 1, 2019, Thomas Steiner succeeded Peter Mooslechner as a new member of the Governing Board. On July 11, 2019, Gottfried Haber ­succeeded Andreas Ittner as Vice Governor of the OeNB, and Eduard Schock succeeded Kurt Pribil as a new member of the Governing Board. Finally, on September 1, 2019, Robert Holzmann succeeded Ewald Nowotny as ­Governor of the OeNB.

On December 31, 2019, the Governing Board of the OeNB comprised the following members

From left to right: Vice Governor Gottfried Haber, Governor Robert Holzmann,
Executive Director Eduard Schock, Executive Director Thomas Steiner

The OeNB’s organization

How Austrians bank and pay in an increasingly ­digital world

The OeNB regularly monitors the impact the ongoing digital transformation of financial services has on households, banks, payment services providers and on the use of cash. Keeping track of these developments is an integral part of the OeNB’s role in supervising banks, overseeing payment systems, providing payment services as well as producing, processing and supplying cash in Austria. In particular, the OeNB analyzes how Austrian consumers react to new payment trends, how developments in Austria compare with other countries and what might be on the horizon.

OeNB survey suggests that digital ­payments are on the rise

The OeNB has repeatedly carried out surveys on payment behavior in Austria, most recently in the third quarter of 2019. 1 Against the survey of spring 2018, ownership of devices that can be used for digital payments had increased slightly. In fall 2019, some 72% of Austrians had a computer or notebook, 77% a smartphone, 33% a tablet and 6% a smartwatch. About 75% reported to use the Internet on a daily basis. To ensure that everyone has access to banking and payment services, it is equally important to know the share of the Austrian public that does not use such technologies. According to the survey, approximately 16% do not use the Internet. From spring 2018 to the third quarter of 2019, the share of people that do not have a ­mobile device (smartphone, tablet or smartwatch), had decreased from about one-quarter to one-fifth.

People increasingly bank with mobile devices

At some 58%, the percentage of Austrians using online banking (chart 1) remained unchanged against 2018. While above the EU average, Austria’s figure is neither high nor low compared with European peers, with the Scandinavian countries and the Netherlands having reached levels above 80%. 2 At the same time, mobile devices have become increasingly popular for online banking in Austria, with 62% of online banking users stating that they exclusively or additionally use their smartphone or tablet to access online banking.

The take-up of online banking continues to vary significantly according to sociodemographic characteristics. While 84% of under 35 year olds bank online, only 15% of over 65 year olds do the same. There is also a significant divide between men (63%) and women (52%) as well as by income and level of education (82% of ­respondents that have completed high school; 25% of unskilled respondents).

The use of online banking is closely correlated with the frequency of visits to bank desks. Among bank customers that do not use online banking, 61% visit a bank desk at least once a month, while this is true of a mere 23% of online bankers. Of the latter, 50% use face-to-face banking services once a year at most. Increased future use of online banking is therefore expected to go hand in hand with a further reduction in the demand for bank teller services. Interestingly, urban and rural areas do not differ much in terms of the use of online banking, which is relevant for ensuring banking services in rural areas. In villages with up to 5,000 inhabitants, some 55% of the population banks online; this figure comes to 64% in cities with over 50,000 inhabitants.

Apart from the trend from face-to-face ­toward online banking, self-service banking is on the rise too. Overall, some 39% of the population continues to bank face to face at least once a month, and this share has not fallen significantly since 2018. At the same time, the share of people using the self-service area of a bank branch at least once per month has increased from 58% to 63%.