ZURICH/FRANKFURT (Reuters) - BAWAG PSK [CCMLPB.UL], the Austrian bank majority owned by private equity group Cerberus Capital Management [CBS.UL], increased first-half pretax profits by 2.5 percent and bolstered its capital strength as it prepares for a share offer this year.
Rothschild is advising BAWAG's owners on the share listing that could take place by the autumn, two sources close to the matter told Reuters on Thursday.
Morgan Stanley <MS.N> and Goldman Sachs <GS.N> have been named the top global coordinators among a number of banks working on the deal, which sources close to the matter said in June could value Austria's fourth-biggest lender at up to 5 billion euros.
Cerberus owns 52 percent of BAWAG and GoldenTree Asset Management 40 percent. The plan is to list a stake of 20 to 30 percent of the lender, which Cerberus acquired with other investors for 3.2 billion euros in 2007.
One source said the sole listing would be in Vienna.
Rothschild, Morgan Stanley, Goldman Sachs and BAWAG declined to comment, but BAWAG says on its website that an IPO is among a range of strategic options under review.
BAWAG has more than 2.2 million customers and nearly 40 billion euros ($47.4 billion) in assets.
Unlike other Austrian banks that expanded heavily in central and eastern Europe BAWAG remained focussed on western markets, with its home market accounting for two thirds of its customer loan book while also operating in other European and U.S. retail, corporate, commercial real estate and mortgage markets.
Last month it bought German regional lender Suedwestbank for an undisclosed price.
BAWAG is keen to make more acquisitions in Germany, Austria and Switzerland (DACH), Chief Executive Anas Abuzaakouk said.
"We are actively looking at many opportunities across the DACH region. We think the region has a lot of opportunity for consolidation," he told Reuters.
BAWAG's fully loaded common equity tier 1 (CET 1) capital adequacy ratio rose to 16.5 percent of risk-weighted assets at the end of June, up 1.4 percentage points from the end of 2016.
BAWAG has been hoarding capital to finance acquisitions and aims for a CET 1 ratio of only more than 12 percent this year. Based on a 12 percent level, it had a return on equity (ROE) of 16.6 percent in the second quarter. Its headline ROE was 13.1 percent.
Abuzaakouk said the bank was deliberately overcapitalised to finance acquisitions.
BAWAG refrained from commenting further on its 2017 targets given the strategic review under way. Those targets include ROE of 15 percent based on a 12 percent CET 1 ratio and pretax profit of more than 500 million euros.
It made 251 million euros before tax in the first half.
(Editing by Francois Murphy, Greg Mahlich)
