First time in Austria: BAWAG P.S.K. launches capital protection for fund savings plan

• Domestic investment behaviour has been at a standstill for 25 years: Currently more than €183 billion in 'cash'
• Independent of developments on the stock exchange: capital protection on savings plan deposits until the end of the year
• New product for newcomers to securities combines savings habits and the need for security
• New product range: 'Ertragsboxen' 'Start' and 'Plus' and 'Einfach Online Depot'

VIENNA, Austria - February 18, 2020 - Austrians are disciplined savers - but when it comes to trying out investments in securities and being able to take advantage of higher yield opportunities, many have shied away from this for decades. In order to combine these two very long 'entrenched' habits, BAWAG P.S.K. is the first bank in Austria to launch a fund savings plan for newcomers, which secures deposits in the form of capital protection until the end of the year - up to € 100 per month - regardless of the valuations of capital markets at the end of 2020. 'With our new product, we want to help customers to overcome their shyness about investing in the capital markets, which is highly beneficial to attaining long term return objectives: We are making it possible to gradually switch from tricycles to two-wheelers - but with support and prudent risk management,' explains David O'Leary, Member of the Managing Board of BAWAG Group and responsible for BAWAG P.S.K. Retail & SME in Austria.

For 25 years: Little movement in domestic investment behaviour

Private households in Austria broke through the '700 billion euro barrier' for the first time in terms of financial assets at the end of the first half of 2019 - in 1995, the value was about € 252 billion - but the composition of assets has hardly changed for two decades, as an analysis by BAWAG P.S.K. shows. According to OeNB statistics, the share of bank deposits has remained the highest since 1995 and currently stands at about 40%. Over the past 25 years, the share of overnight deposits in total financial assets has increased more than sixfold from about 3.5% to 23%. In (nominal) absolute terms, the volume has increased more than eighteenfold from € 8.7 billion in 1995 to currently more than € 159 billion - despite the low interest rate environment that has prevailed for several years. By contrast, the share of listed shares has developed less dynamically since 1995 (1.5% vs. 3.6%), as has the share of investment certificates (4.9% vs. 9.0%).

For newcomers to securities: ErtragsBox 'Start' with capital protection

To change this, BAWAG P.S.K. has revised its entire range of securities accounts and developed a new product especially for the needs of newcomers to the securities market: The new 'ErtragsBox Start' securities account model focuses on simplicity and transparency and includes personal advice. Customers can choose between different asset management funds, the all-in fee is 0.96% p.a. plus 20% VAT, there is no minimum volume and no minimum fee. On top of this, if a new fund savings plan is concluded in selected funds by 31.03.2020, all payments up to a maximum of €100 per month as of the cut-off date 31.12.2020 are secured by the capital protection. This means: Even if the markets should develop negatively, the money saved is protected against loss. Any difference between the total of all payments made under the fund savings plan, including custody account fees, and the calculated value of the saved fund on the cut-off date 31.12.2020 will be credited to the client's custody account at the end of February 2021. After 31.12.2020, the fund savings plan is subject to the selected investment risk.

Solutions for more experienced investors: 'ErtragsBox Plus' and 'Einfach Online Depot'

BAWAG P.S.K. launched the 'Ertragsbox Plus' product for more experienced investors or newcomers to securities with previous knowledge who value regular personal advice. The custody account fee starts at € 3 per month, and customers can invest in a broad global product universe. In addition, there is a uniform expense ratio for all securities to be held in custody, and there are no additional third-party fees for the purchase/sale of shares and bonds. The 'Einfach Online Depot' is aimed at investors with an affinity for online trading who want to trade anytime and anywhere - without having to take advantage of personal advice at a bank branch. The focus is on a broad product universe and the pricing is at the attractive level of online brokers (e.g. custody account fees from € 1 per month and transaction fees from € 4.50 plus 0.175%), third-party fees are not included.

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Press release (PDF)