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Austrian banks lost €44 billion from bad debts

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Austrian banks lost €44 billion from bad debts
Austrian National Bank. Photo: APA/ROLAND SCHLAGER
13:01 CEST+02:00
Austrian banks have spent €44 billion (US$60 billion) to cover bad loans since the world-wide financial crisis erupted in 2008, according to an announcement by Austria's national bank on Monday.

Two thirds of the operating profit had to be expended for credit risks, the Austrian National Bank (OeNB) announced on Monday. In 2013 around 88 percent of operating profits were used to cover credit risks.

Problems occured especially in Eastern Europe, though, the Head of the OeNB Ewald Nowotny regards the commitment of Austrian banks to Eastern Europe as "a commercial success". However, profits could only be obtained in two or three states of the region. This was no reason to withdraw from there, Nowotny added.

Furthermore it would be difficult to compare the Central and Eastern European States. The Czech Republic, Poland and Slovakia for example were not comparable with Ukraine or Hungary, whereas the situation in Romania had improved, Nowotny said.

The OeNB urged the banks to increase their "sustainability and competitiveness". Above all they should improve the equity ratio. In 2013 the situation for Austrian banks had improved but on an international comparison they still have too little capital which was held to protect against risks, OeNB Vice Governor Andreas Ittner said.

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