Austria might move ÖVAG assets to Hypo
The Local · 1 Sep 2014, 17:57
Published: 01 Sep 2014 17:57 GMT+02:00
- Hypo bank makes further shocking losses (28 Aug 14)
- S&P's downgrades three Austrian banks (13 Aug 14)
- Hypo bank defaults on bond payments (07 Aug 14)
- Fischer signs Hypo law (31 Jul 14)
- World Bank hit by Hypo bank 'bail in' (16 Jul 14)
Now, certain assets within Austrian Volksbank AG are causing considerable losses, such as ÖVAG’s Romanian unit, plus a portfolio of corporate and real estate loans. By moving these non-performing assets under the umbrella of the already-failed Hypo Alpe Adria Bank, the Austrian Volksbank could significantly improve its capital ratios.
Further, such a move could reduce the need for write-downs if ÖVAG fails the European Central Bank’s Comprehensive Assessment in October, according to un-named sources familiar with the matters.
According to a report last week in the Austrian daily Der Standard, Volksbanken-Verbund, the combination of ÖVAG and nearly 50 regional cooperative banks that own it, will likely fail the health check the ECB is conducting before it begins to supervise euro-area banks on Nov. 4.
There is likely to be a capital shortfall of €600 million (US$788 million) to €800 million.