Author Topic: Central Bank: Most Austrian Banks Are Well Capitalized  (Read 2025 times)

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Howard Bourne

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Central Bank: Most Austrian Banks Are Well Capitalized
« on: October 25, 2013, 17:08:17 PM »
By Nicole Lundeen

VIENNA--Most Austrian banks are well capitalized and continue to improve their capital reserves, the Alpine country's central bank said late Wednesday.

In a statement issued in response to a Breakingviews article by Reuters news agency, "Austrian Banks - Europe's next problem child?," the central bank said the average core tier 1 ratio of Austrian banks, a measure of bank's capital reserves, increased by 65 basis points in 2012 to 11.0%.

The central bank said while admittedly some comparable banks in other countries have higher core tier 1 ratios, these banks also have higher levels of leveraging.

"As is known there are however individual banks that have special European Commission [restructuring] programs," the central bank added.

The most well known of these banks is the troubled Hypo Alpe-Adria-Bank AG, which recorded a loss of 859.8 million euros ($1.16 billion) in the first six months of 2013. Hypo Alpe-Adria-Bank was nationalized in 2009 as the bank faced near collapse in the wake of the financial crisis and high exposure to the Balkan region.

In total, the bank has received more than EUR2 billion in state aid from Austria and the government agreed in July to provide an additional EUR700 million to help the bank meet its regulatory requirements--something Hypo Alpe-Adria-Bank said it would be unable to do without Support