Creditanstalt

The Creditanstalt was founded in 1855 by Salomon Mayer von Rothschild and his son Anselm Salomon von Rothschild, with support from Austrian finance minister Karl Ludwig von Bruck and the financial involvement of notable figures of the Austrian and Bohemian high nobility. It was inspired by the Pereire brothers' Paris-based Crédit Mobilier (est. 1852), and represented a defensive move against the Pereires' aggressive expansion into Europe in competition with the long-established Rothschilds. The application presented to the Austrian imperial ministry guaranteed the initial capital subscription, with 40 percent taken by the Rothschild houses in Vienna, Frankfurt, and Paris, 50 percent by prominent aristocrats (Max Egon zu Fürstenberg, Johann Adolf II. zu Schwarzenberg, Vincenz Karl von Auersperg, Otto Ferdinand von Chotek, Louis Haber von Linsberg), and 10 percent by the private Prague banking house of Leopold von Lämel.

The Creditanstalt immediately became the leading bank in the Habsburg Monarchy. It opened its first branch in Prague in 1856. By 1867, it had established further branches in Pest, Brno, Brașov, Lviv, and Trieste, and on that year it sponsored a Hungarian affiliate, the Hungarian General Credit Bank, into which it subsequently merged its prior Pest branch. In 1869 it co-founded the Austro-Ägyptische Bank in Cairo, together with the Anglo-Austrian Bank. Albert Salomon Anselm von Rothschild, Anselm Salomon's son, took control of the Creditanstalt in 1872, and was in turn succeeded in 1911 by his son Louis Nathaniel de Rothschild.

The Creditanstalt's circumstances were dramatically affected by Austria-Hungary's defeat in the First World War, its subsequent dissolution, and the formation of the First Austrian Republic. In 1919, it had to sell its operations in what had become Czechoslovakia to the Prague-based Böhmische Escompte-Bank. In 1920, its branch in Ljubljana was reorganized as a fully-fledged Yugoslav bank, the Credit Institute for Commerce and Industry (Slovene: Kreditni zavod za trgovino in industrijo. It also sold its branches in the newly formed Poland to Akcyjny Bank Hipoteczny we Lwowie and Bank Dyskontowy Warszawski in an all-shares transaction, following which it held a third of each of the two banks' capital. Deprived of its international outlook, the Creditanstalt focused on the Austrian market. In 1926, it purchased the Viennese operations of the Anglo-Austrian Bank which had become a British bank following recapitalisation by the Bank of England; since that transaction was structured as an exchange of shares, the Bank of England, through its British subsidiary the Anglo-International Bank, became a significant shareholder of Creditanstalt. In 1929, just at the time of Wall Street crash and under pressure from the Austrian government led by Johann Schober, Creditanstalt purchased its distressed peer the Allgemeine Bodencreditanstalt, which itself was dragged down by its acquisition of Austria's Unionbank two years earlier.

In 1894–1896, the Creditanstalt erected a new building for its branch in Prague, designed by architect Emil von Förster with sculptures by Antonín Popp. In 1907-1909 the Creditanstalt erected a monumental branch building in Trieste, on what later became Piazza della Repubblica.

Downfall and merger

Burdened by the troubled legacy of its recent acquisitions, the Creditanstalt declared on 11 May 1931 that it was unable to publish its financial statements for 1930, immediately triggering panic. At that time, it represented 27 percent of the Austrian banking sector's total assets, a sum equivalent to 16 percent of the country's GDP, so that there was no option to have it absorbed by another larger banks as had been done with Unionbank in 1927 and Bodencreditanstalt in 1929. This was one of the first major bank collapses that initiated the Great Depression. Chancellor Otto Ender organized a rescue that entailed cost-sharing by the Austrian government, the Oesterreichische Nationalbank, and the Rothschild family, rejecting nationalization plans advocated by the Social Democratic Party. The group's foreign assets were transferred to a Monaco-registered entity, the Société Continentale de Gestion, of which Creditanstalt held of the share capital while its foreign creditors were awarded the other half. Creditanstalt's Yugoslav affiliate, the Ljubljana-based Credit Institute for Commerce and Industry, was acquired by the Ljubljana City Savings Bank, the Savings Bank of the Drava Banovina, and German-Slovenian businessman August Westen. The Creditanstalt's bankruptcy and its impact in producing a global banking crisis provided a major propaganda opportunity for Adolf Hitler and the Nazi Party in which they further blamed the Jews for German and international economic and social troubles.

In late 1933, Chancellor Engelbert Dollfuß ordered the Creditanstalt's merger with the Wiener Bankverein and the sound parts of the Niederösterreichische Escompte-Gesellschaft, as a consequence of which the bank became majority-owned by the government, while foreigners still held about 42 percent of the share capital. The merged entity took the name Österreichische Creditanstalt – Wiener Bankverein. By early 1938, the bank had branches in Bregenz, Feldkirch, Graz, Innsbruck, Klagenfurt, Leoben, Linz, Salzburg, Sankt Pölten, Villach, and Wiener Neustadt; controlling interests in Bank für Oberösterreich und Salzburg, Bank für Kärnten, Bank für Tirol und Vorarlberg, and Steiermärkische-Escompte-Bank; and minority stakes abroad in the former Wiener Bankverein affiliates in Poland and Yugoslavia as well as the Banque Franco-Belge et Balkanique in Bulgaria, plus a board representation in the Hungarian General Credit Bank.

Merger with Bank Austria and aftermath

In 1997, the Austrian government sold its majority ownership stake in Creditanstalt to Bank Austria (BA), triggering a crisis in the ruling coalition between the Social Democratic Party and the Austrian People's Party – since the Creditanstalt was considered to be part of the Austrian People's Party's sphere of influence under the country's distinctive Proporz arrangement, whereas both of Bank Austria's predecessor entities, the Länderbank and the Viennese Zentralsparkasse, were associated with the political left. In 2001, Bank Austria in turn was acquired by Germany's HypoVereinsbank (HVB), which merged it with Creditanstalt in 2002 to create Bank Austria Creditanstalt (BA-CA). In 2005, HVB was taken over by Italy's UniCredit. After 153 years, the Creditanstalt brand name was finally phased out in 2008, even though it survived in a property subsidiary named CA Immo.