Raiffeisen – the Vincenz blowback

Local Raiffeisen banks (around 900 branches) have pushed the narrative that all was OK at the bank and that the affair around Mr. Vincenz was of little consequence.
Today, 1 March 2019, the Raiffeisen Group presented its annual results. Profits have declined 41%, CHF 270 million francs have been written down. One positive trend though was that Raiffeisen draws roughly 70 percent of its income through mortgage lending and other interest income, expanded its market share of home equity loans in Switzerland to 17.6 percent.

Highest concern of all though was the fallout from former CEO Pierin Vicenz. It was almost a year ago, Chairman of Raiffeisen Kurt Sidler, announced that "None of our cooperative banks are threatened with financial damage by the work of Vincenz. They are very well positioned."
Now with figures on the table, the affair Vincenz has clearly caused a massive downside to Raiffeisen Bank. Strange how top executives offer a full deniability of obvious facts, until those facts become absolutely obvious.
Even now, some top managers of Raiffeisen are claiming that the downturn is a hiccup due to the fact that the migration to the new core banking system took longer than expected.

But the figures do not lie, and the Vincenz scandal certainly was a key factor in destabilizing the customer base.
New CEO Heinz Huber said 2019 would be a year of transition, and that Raiffeisen would also devote itself to digitization projects. He did not elaborate on whether Raiffeisen would demand some kind of restitution from Vincenz, who is the subject of a criminal investigation, or from Patrik Gisel, who stepped down hastily as CEO three months ago though is not accused of wrong-doing.

Ex-CEO Restitution?

Lachappelle, who took over as part of a near-complete overhaul of board and management last year, had flagged potential measures against former management and oversight, ordering a review to evaluate the feasibility.

The criminal investigation, which saw Vincenz remanded in custody for nearly months last year, will show whether Raiffeisen has the grounds for a claw-back against the ex-CEO, or against auditor PWC. Vincenz hasn't been charged by prosecutors.