• Austria's news in English

Bad bank Heta has €7 billion capital hole

The Local · 18 Jun 2015, 10:59

Published: 18 Jun 2015 10:59 GMT+02:00

Facebook Twitter Google+ reddit

Experts say the value of the bank's assets have decreased significantly.

The size of its capital hole will help determine the extent of debt 'haircuts' that its creditors face.

Its top executive told Austrian radio that there was no other way to deal with that gap other than a debt haircut.

“Our job is to sell our assets - the collateral as well as the loans, most of which are non-performing - as well as we can,” Chief Executive Officer Sebastian Schönaich-Carolath told Oe1 radio on Thursday, when asked if a debt cut was needed. 

The finance ministry says it will negotiate with the bank's creditors over debt reduction so that taxpayers don't have to cover the losses.

Hypo Alpe nearly collapsed over bad loans in the former Yugoslavia.

After €5.5 billion of state aid and growing public discontent, Austria’s government halted further support in March.

Heta is the first European bank to be wound down under the EU’s Bank Recovery and Resolution Directive, a new law designed to protect taxpayers from the cost of bank failures.

Story continues below…

The main investors in Heta’s bonds are German state-owned banks, mortgage banks and insurers. 


For more news from Austria, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Verdict on swimming pool rape case overturned
The Theresienbad swimming pool in Vienna. Photo: Wikimedia

An Iraqi refugee who was jailed after claiming it was a sexual emergency when he raped a boy in a swimming pool has had the sentence overturned.

Vienna Comic Con promises to be 'bigger and more galactic'
Cosplay star Yaya Han. Copyright: Yaya Han/Bryan Humphrey

Comic Con returns to the Austrian capital on November 19th-20th at the Messe Wien.

Three refugees arrested on drugs charges
Cannabis plants. Photo: J. Patrick Bedell/Wikimedia

A gang of three Afghani drug dealers has been busted in Vienna.

Hungarian woman crushed by snowcat piste machine
Snowcat machine. Photo: Melensdad/Wikimedia

A young Hungarian woman has died after being crushed by a snowcat piste machine on the Dobratsch mountain in Carinthia.

Austrian policeman sentenced over 'Heil Hitler' salute
Photo: Flickr

A policeman in Austria was sentenced on Thursday for shouting "Heil Hitler" at a driver during a traffic check at the Hungarian border in April.

Scary clown craze endangers crucial work of clown 'doctors'
Photo: Bojan Tavcar

Within the last couple weeks, disturbing events involving masked individuals has caught public attention in Austria.

Chimney sweep rescues lost mushroom picker
Photo: James Lindsey/Wikimedia

A 76-year-old Austrian man who went out mushroom picking almost froze to death after getting lost and spending the night in the forest.

Refugees sold into forced prostitution
File photo: UNHCR

Female refugees are being sold into forced prostitution in Austria, a police investigation into human trafficking has found.

Driverless bus takes a spin around Salzburg's old town
The Arma driverless shuttle bus. Photo: Navya

A driverless minibus has made a test journey in the city of Salzburg.

No jail time for asylum seeker who dumped baby in road
Photo: Paul Gillingwater

A man who grabbed his own child and dumped her in the middle of a busy road has been given a nine-month suspended sentence.

12 brilliant German words you won't find in English
Sponsored Article
Last chance to vote absentee in the US elections
Five films which will change your mind about Austrian cinema
Those surprising Austrians!
100 years since the last emperor's death
Afghani family's new home in Austria
Der you learn Deutsch?
Delighted by the light
Beware these passport scams
Of course we skipped Oarsch
Foodies rejoice at the choice!
Travel & Tourism
10 years after her escape from captivity
Surviving the Brexit for British expats
Day 2 of the World Bodypainting Festival 2016
Is Islam hostile to Western society?
Bodypainting festival in southern Austria
Europe's ice cream capital
Best Austrian beauty spots
Travel & Tourism
Three days in Vienna as a tourist
How to make friends in Austria
jobs available