Austria

Germany gets a chastening exit from HSH Nordbank

28 February 2018

The public sector owners of the battered lender are selling out for 1 billion euros, after pumping in 10 times that. Despite restructuring, HSH remains a ropey asset. But Cerberus and its fellow acquirers are buying in at a low enough level to make a healthy return.

Steinhoff reminds creditors they are not all equal

1 February 2018

The scandal-hit retailer is planning early repayment of a $1.3 bln South African bond in return for releasing funds to cash-strapped European brands. Other mainly international creditors will be asked for waivers. It’s an early indicator of the unofficial pecking order.

Europe poorly placed for Austria’s rightward drift

16 October 2017

The far-right Freedom Party scored well in the country’s election and may enter government. It has been in power before. However, its presence could make Europe’s immigration problem harder to manage, and further integration harder to agree. Centrifugal forces have not gone away.

Cerberus tests demand with long-awaited Bawag exit

27 September 2017

The U.S. buyout firm is planning an IPO of the Austrian lender it bought, damaged by the Refco trading scandal, in 2006. For Cerberus and its partners, it has been a drawn-out turnaround. For new investors, Bawag is temptingly digital and efficient. The caveat: it’s still a bank.

Europe and U.S. clash over who bullies the bullies

16 June 2017

Germany has bristled at draft U.S. sanctions against Russia, claiming the global policeman is overplaying its clout. Europe is readying a big fine for tech giant Google for doing something similar. Bullies aren’t easily toppled, but countries are harder to rein in than companies.

Where to put Europe’s bank regulator? Try Bulgaria

26 May 2017

Brussels has invited member states to bid to host the European Banking Authority when its current host, Britain, quits the EU. The EBA hasn’t exactly dazzled in its handling of bank stress tests. But it could be a decent trophy for a non-euro country that feels unloved by the bloc.

Austria’s “nein” to far-right buys time for reform

4 December 2016

The presidential election ended in a clear defeat for Norbert Hofer's Freedom Party. Chancellor Christian Kern has just under two years to deliver a "new deal" including lower tax and more infrastructure spending. His right-wing opponents have taken a knock, but remain strong.

Europe’s long weekend presents a triple threat

1 December 2016

In the space of just 48 hours Italy's premier will face a make-or-break referendum, Austria could elect a far-right president, and Greek debt talks will reach a head. All three have the potential to revive the centrifugal forces that could send Europe spinning out of control.

Erste sobers up over-ebullient investors

4 November 2016

The Austrian lender warned of flat revenue next year, despite its presence in fast-growing European economies. Fast deposit growth cut Erste's loan margin by 5 pct in the third quarter. The bank's valuation was too rosy, but investments in digital should eventually bear fruit.

Heta shows why bailouts are easier than bail-ins

4 October 2016

Austria has a deal to hit creditors of failed former lender Hypo Alpe Adria after two years of wrangling. Theoretically, a bail-in could, if needed, raise capital at much-bigger Deutsche Bank. But Heta’s tortuous saga is one reason Berlin might favour a taxpayer bailout.

Raiffeisen yet to wean itself off European sprawl

18 August 2016

The Austrian lender upped its capital position in the second quarter after EU stress tests branded it a laggard. But Raiffeisen still aims to be in over a dozen countries, and bad loans are 10.4 pct of its book. Falling interest income and high-risk growth make for an uneasy mix.

Austria’s far-right surge should spur reform

23 May 2016

The country may elect Europe’s first fiercely anti-immigration president. Though the role is largely ceremonial, such an outcome would be a triumph for a party with an ugly past. To halt its rise, Vienna needs to fix fears over asylum seekers and flawed welfare and tax policies.

Heta bail-in mess nears suitably ugly endgame

18 May 2016

Austria has met creditors halfway over the rump of lender Hypo Alpe Adria. Senior bondholders can receive a bond today worth about 90 pct of their original investment, up from an 82 pct offer in March. With some holdouts remaining, it won’t fully salvage a poorly handled affair.

Raiffeisen’s untangling gets off to a bad start

11 May 2016

The Austrian bank may merge its foreign-focused listed subsidiary with its unlisted domestic business. But considering this has been necessary for some time, the bank has given precious little detail. The uncertainty isn’t great for a group with a thin capital ratio.  

Austria warrants a less sanguine market reaction

9 May 2016

Chancellor Werner Faymann has quit amid populist gains and shrinking regard for his grand centrist coalition. Yet the spread of Austrian debt over German bunds narrowed. The migrant crisis may push Vienna further right. If Poland and Hungary are guides, business could suffer. 

Austria may have to accept painful hit on Heta

9 March 2016

Bondholders of bust bank Heta rejected a payback offer from Austria. Heta’s guarantor, a province, faces ruin. In an ideal world, bank creditors are held to account and governments ensure insolvency is predictable and fair. But this is Austria, where two wrongs can make a right.

Time for European bank weirdos to simplify

3 February 2016

Austria’s Raiffeisen Bank International would give its regional-banking parent a capital bump if the pair merged, its boss reckons. Streamlining the ownership of France’s Credit Agricole also would improve its balance sheet. Neither has made a good case for convoluted structures.

Raiffeisen’s bonus plan is a capital idea

20 August 2015

The Austrian bank’s listed arm will only pay bonuses if its balance sheet position improves. That safety-first policy befits its considerable exposure to Russian borrowers. Over-reliance on any single target for setting pay can be risky, but this is a step in a helpful direction.

Austria pricked by court in Heta bail-in tangle

28 July 2015

A law which wiped out guaranteed creditors of bust bank Heta has been thrown out. The sums are small, but the court’s decision may embolden creditors in a bigger fight, over 10 bln euros of other state-backed debt. The verdict hurts Austria, but the legal logic is hard to fault.

Heta deal puts EU bank bail-ins back on track

7 July 2015

Austria has offered 1.2 bln euros to Bavaria to compensate for state bank BayernLB’s investment in the remains of Hypo Alpe Adria. Given Heta is a test case for rescuing banks without taxpayer cash, that’s just as well. It implies not all bail-ins need to end in court.