AGL 37.62 Decreased By ▼ -0.53 (-1.39%)
AIRLINK 122.00 Increased By ▲ 0.49 (0.4%)
BOP 5.72 Decreased By ▼ -0.13 (-2.22%)
CNERGY 3.71 Decreased By ▼ -0.04 (-1.07%)
DCL 8.32 Decreased By ▼ -0.08 (-0.95%)
DFML 40.72 Decreased By ▼ -0.17 (-0.42%)
DGKC 84.60 No Change ▼ 0.00 (0%)
FCCL 33.25 Increased By ▲ 0.55 (1.68%)
FFBL 65.50 No Change ▼ 0.00 (0%)
FFL 9.92 Decreased By ▼ -0.13 (-1.29%)
HUBC 103.79 Decreased By ▼ -0.01 (-0.01%)
HUMNL 13.23 Decreased By ▼ -0.02 (-0.15%)
KEL 4.41 Decreased By ▼ -0.02 (-0.45%)
KOSM 7.05 Decreased By ▼ -0.04 (-0.56%)
MLCF 37.70 Increased By ▲ 0.20 (0.53%)
NBP 59.86 Decreased By ▼ -0.39 (-0.65%)
OGDC 175.19 Increased By ▲ 2.94 (1.71%)
PAEL 24.85 Increased By ▲ 0.05 (0.2%)
PIBTL 5.73 Increased By ▲ 0.03 (0.53%)
PPL 145.97 Increased By ▲ 4.28 (3.02%)
PRL 22.77 Increased By ▲ 0.05 (0.22%)
PTC 14.97 Increased By ▲ 0.23 (1.56%)
SEARL 65.14 Increased By ▲ 0.58 (0.9%)
TELE 7.04 Decreased By ▼ -0.10 (-1.4%)
TOMCL 35.65 Increased By ▲ 0.15 (0.42%)
TPLP 7.32 Increased By ▲ 0.03 (0.41%)
TREET 13.95 Decreased By ▼ -0.25 (-1.76%)
TRG 50.90 Decreased By ▼ -0.85 (-1.64%)
UNITY 26.40 Decreased By ▼ -0.20 (-0.75%)
WTL 1.22 No Change ▼ 0.00 (0%)
BR100 9,543 Increased By 59.5 (0.63%)
BR30 28,579 Increased By 208.3 (0.73%)
KSE100 89,476 Increased By 509.4 (0.57%)
KSE30 27,943 Increased By 115.8 (0.42%)

Nationalised Austrian bank Hypo Alpe Adria has failed to justify the state aid it has received and may have to pay it back if it does not improve on its latest restructuring plan, according to a letter from Europe's competition chief.
Hypo Group Alpe Adria (HGAA) has received 1.5 billion euros ($2.0 billion) in repeated injections of government aid since its 2009 nationalisation and is expecting another 700 million euros soon. It has put all its operating units up for sale.
The bank, which was pushed to the brink of insolvency by a decade of expansion into the Balkans, hopes to sell its Austrian unit this year as a first step, but has said the sale of units in Italy and south-eastern Europe will be slower. Hypo has pleaded for more time for its revamp, which it says has been slowed down by tough markets that make it impossible to fetch decent prices for the sale of units, and Austria and the EU are now in last-ditch talks over a timetable.
The letter from European Union Competition Commissioner Joaquin Almunia, published by Austria's profile magazine on Saturday and also seen by Reuters, says the bank is not meeting Austrian commitments that allowed the EU to approve the aid. "The bank has, due to fundamental deficiencies in credit and risk management, been continuing in the last years to engage in risky business at unprofitable terms," Almunia wrote in the March 14 letter to Austrian Finance Minister Maria Fekter.
"I have to inform you that it is not possible for me to propose to the College of Commissioners a positive decision for HGAA based on the provided plan," he wrote, adding Hypo could have to pay back the aid. "The only alternative to a negative decision with recovery is a true liquidation scenario, where the operational parts of the bank are sold within a short timeframe, ie by the end of 2013, or put into run-down if the sales are not achieved."
The Austrian Finance Ministry and Hypo did not immediately respond to requests for comment on the letter. Fekter has rejected the idea of creating a "bad bank" to handle toxic bank assets along the German model, but Chancellor Werner Faymann said last week Austria was seriously considering such a move.

Copyright Reuters, 2013

Comments

Comments are closed.