Roots and History

It all started in 1819 with the first Austrian savings bank.

ERSTE Foundation > Roots and History

Long before we became a foundation and a strong partner of Non-Governmental Organisations in Europe, which was only in 2003, we were a social business ourselves. In 1819, some Viennese citizens founded a private association to enable access to common people to make provisions for the future and to provide a secure and independent livelihood for themselves and their families. It was run by dedicated volunteers in a poor neighbourhood. It was innovative and obviously sustainable. It was called ‘Erste oesterreichische Spar-Casse’ and was the ‘first Austrian savings bank’.

ERSTE Foundation evolved from the Erste Österreichische Spar-Casse in 2003. In 1819, this savings bank association opened the first bank in Vienna for individuals who previously had not been able to provide for their future themselves.

In 1869, for the 50th anniversary of Erste Österreichische Spar-Casse, a polka was commissioned from Eduard Strauß, the youngest son of Johann Strauss Father and little brother of famous Johann Strauss Son. The title of his composition is called “The Bee”. Click here to listen:

The Founder: A Catholic Priest

The founder of Erste österreichische Spar-Casse was a churchman of vision and social commitment. Johann Baptist Weber was a Catholic priest in the parish of St. Leopold in one of the suburbs of Vienna during the Biedermeier period. Before that, he had been a chaplain in Wien-Lichtental, at the time when Franz Schubert performed his ecclesiastical works there, and in the parish of St. Peter in the city centre, next to which the head office of the Erste österreichische Spar-Casse was to be located from 1823.

St. Leopold, Vienna, location of the first branch of Erste österreichische Spar-Casse

Weber was born in Vienna in 1786. A social entrepreneur before the term was even coined, Johann Baptist Weber founded several social institutions, including a kindergarten, a poorhouse and two schools, one of them for girls only. He was 33 years old when he came up with the idea of founding a bank for the destitute with the help of affluent citizens. Weber did not stay in Vienna’s Leopoldstadt district for too much longer after the founding of Erste oesterreichische Spar-Casse and, following another stint as a priest in Mannswörth, he became chaplain at Schönbrunn Palace. Weber died in 1848 at the age of 64 in his home town. He was buried at the cemetery of Altmannsdorf. ERSTE Foundation not only takes care of his grave, but also took charge of renovating St. Leopold parish hall, which is named after him.

In his parishes, he witnessed the social changes caused by industrialisation at first hand. After the Napoleonic Wars, Austria was bankrupt and poverty ran rampant across the country. Father Weber wondered how he could help the people flocking from the country to the city, who now earned their living as maidservants, day labourers, factory workers or simple craftsmen, live a dignified life in this world. He was convinced that just being charitable was not enough. Therefore, he asked affluent citizens in his parish in St. Leopold to pledge 100 to 1000 gulden for the creation of a savings fund. In 1819, the savings bank association already had 55 members, whose deposits laid the foundation for the Erste Österreichische-Spar-Casse, which opened on 4 October 1819.

The Savings Bank Idea

In the early 19th century, industrialisation was progressing rapidly. The rural population flocked to the cities and new social classes evolved for which there had been no social protection up until then. Even banking services were only available to affluent people.

From Great Britain and Germany, the concept of the savings bank moved to the south, and, as early as 1819, the ‘Erste Österreichische Spar-Casse’ was founded in Vienna. Citizens worked on a voluntary basis – the Emperor officially acknowledged the charitable nature of their efforts! – and secured the deposits of the savings fund with their private assets. This enabled factory workers, servants and craftsmen to save money with interest for the first time and thus provide for their futures themselves.

Savings Book No. 1
Erste Österreichische Spar-Casse, 1819

The very first savings book of Erste Österreichische Spar-Casse, issued 1819, belonged to a woman: Marie Schwarz.

This idea, which was tried and tested at local level in the second district of Vienna, turned into a successful model in the countries of the Danube Monarchy.

Adopting virtually the same statutes as the original institute, a number of savings banks were founded in many parts of Austria, Central and Eastern Europe, among others in: Laibach (today: Ljubljana), Innsbruck, Bregenz and Spalato (Split) in 1822, Graz and Prague in 1825, Görz (Gorizia) in 1831, Klagenfurt in 1835, Ragusa (Dubrovnik) and Kronstadt (Brasov) in 1835, Pest (Budapest) in 1839, Hermannstadt (Sibiu) and Zara (Zadar) in 1841, Pressburg (Bratislava) and Trieste in 1842, and Lemberg (Lviev), Kaschau (Košice) and Tyrnau (Trnava) in 1844.

Today, one would call these banks ‘social businesses’: sustainable – i.e. self-supporting – enterprises which aim to fight poverty.

The Legacy

The primary underlying strategy of helping people to become active members of society under their own steam is a well-established practice in development cooperation and community support across the globe today. Instead of making charitable donations, which only alleviate symptoms in the short term, the aim is to establish ‘self-sustaining’ structures, organised locally by the people involved.

We view the historical roots of the initial savings bank idea as a valuable role model and inspiration for our civil-society commitment today. To this end, we founded Zweite Sparkasse in Austria to provide key financial services to people who had previously had no access to them. Together with Erste Group, we launched good.bee, a platform in Central and Eastern Europe for social banking and microcredits and financial service provider for social entrepreneurs.