Bawag Group Sets Ambitious Dividend and Growth Targets

Bawag Group recommends a €6.25/share dividend for 2025, backed by €860M net profit and a 40% surge in net interest income. The bank targets over €960M profit for 2026.

Bawag Group has unveiled a robust dividend proposal for 2025, signaling confidence in its financial trajectory. The bank's management is recommending a distribution of €6.25 per share, a move underpinned by what it describes as exceptionally strong fundamental performance.

Financial Performance Provides a Solid Foundation

The proposed payout is backed by impressive 2025 results. The Austrian financial institution reported a net profit of €860 million, significantly surpassing its internal targets. A key highlight was a 40% surge in net interest income to €1.8 billion, fueled by strategic acquisitions and a favorable interest rate environment.

Profitability metrics were equally strong, with a return on equity reaching 26.9%. Despite the substantial total dividend outlay of approximately €481 million, the bank maintains a comfortable capital position. Its CET1 ratio stood at 14.6% at year-end, nearly two percentage points above its own minimum target of 12.5%. This buffer provides flexibility for both shareholder returns and future expansion.

A Detailed Look at the Dividend Structure

A notable aspect of the dividend proposal concerns its tax treatment for Austrian residents. Of the total €6.25 per share, €4.05 is classified as a capital repayment. For Austrian natural persons, this portion is initially exempt from the 27.5% capital gains tax (KESt), though it does reduce the tax base cost of the shares. The remaining €2.20 is subject to the standard KESt. Shareholders will vote on the proposal at the Annual General Meeting scheduled for April 22, with payment slated for April 29.

Forward-Looking Growth Ambitions

Looking ahead, Bawag's leadership has set ambitious goals. For 2026, the bank is targeting a net profit exceeding €960 million. By 2027, it aims to sustainably break through the €1 billion threshold.

These targets run parallel to ongoing strategic initiatives. The integration of the Dutch digital bank Knab is proceeding according to plan, with completion expected by the end of March 2026. Additionally, the group is actively expanding its digital online brokerage offerings to capture further growth.

On the markets, Bawag shares have gained approximately 26% year-to-date. The stock is currently trading just below its 50-day moving average of €132.67.