According to Austrian media reports, Hypo Group incurred a loss of as much as 500 million euros last year. The headquarters of Hypo Group in Klagenfurt did not want to comment on the reports, so we must wait for the official announcement of results in April.
According to unofficial data, the operational result of the banking group for 2008 is decent, but the net loss occurred due to a large write-off of values in the balance sheet. This is most likely related to the write-off of non-collectible loans (of which, according to Austrian media claims, some are in Croatia) and operations with securities in the American market. Let us recall that in the first half of 2008, Hypo reported a consolidated loss of 62 million euros, and the general director and co-owner Tilo Berlin reiterated what he said two years ago – that the cleaning and tidying of the bank’s balance sheets will occupy it for some time. The bank was recapitalized at the end of last year with 1.6 billion euros, with which, they claimed at the time, the bank was well prepared for difficult times.
Will and how this affect Hypo Croatia? The bank responds that ‘according to the unaudited results, the Croatian bank members of Hypo Group AlpeAdria operated positively in 2008 and the result will be better than in 2007. The audited results of Hypo Group Alpe Adria will be published at the end of April 2009.’
Even with an annual loss of half a billion euros, the bank should maintain a capital adequacy ratio of around 8 percent, unofficially say in the bank (8 percent is the minimum in Austria). However, for borrowing on the international banking market, a minimum of 9 to 10 percent is required; otherwise, the bank’s credit rating falls, which means that it can only borrow under very expensive conditions, if at all. Hypo Group is clearly the only large Austrian banking group with a loss. Namely, the largest Austrian banks, Bank Austria, Erste, and RBA, expect individual operational profits exceeding one billion euros for 2008. For Bank Austria, it should amount to between 2 and 3 billion euros. (Gordana Gelenčer)
