Deutsche Bank to run sale of Hypo Alpe SEE assets

VIENNA Mon May 21, 2012 6:58am EDT

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VIENNA (Reuters) - Nationalised Austrian lender Hypo Alpe Adria HAABI.UL has launched the sale of its southeastern Europe banking network by picking Deutsche Bank (DBKGn.DE) to run a deal it hopes will raise at least 1.5 billion euros ($1.9 billion).

Hypo Alpe Adria Chief Executive Gottwald Kranebitter said Deutsche would begin the process by sounding out the market, which he acknowledged was a tough one, with the goal of being able to act quickly should deep-freeze conditions thaw out after banks hit mid-2012 capital targets.

The exact timeline for a sale remains unclear, but Hypo hopes by the end of this year to know at least "who can, may and wants to" bid for the network. Kranebitter said banks in Europe, Russia, Turkey and southeast Asia could be interested as well as financial investors.

Hypo, which fell into state hands in 2009, is aiming to revamp itself by shrinking and selling assets.

It wants to divest banking units in Austria and Italy as well but sees the banking network in former Yugoslavia as the pearl among its assets.

The group of six banks and leasing operations in Slovenia, Croatia, Serbia, Bosnia and Montenegro is the SEE region's third-largest, with 12.5 billion euros in total assets, 1.1 million customers, 255 branches and 4,600 staff, Hypo said.

An Austria-based holding company steers the division.

Kranebitter put the book value and equity of the SEE bank network assets at around 1.5 billion euros.

"A real success with all these large assets will be not costing taxpayers more money but rather getting the current book value on the market," he told reporters on Monday.

The SEE business generated around 20 million euros of the group's 70 million euro profit in 2011, and the goal was to comfortably beat that performance this year, he added.

Selling the network at book value would have a "very positive" impact on the group's capital ratios and let it easily meet regulatory requirements, Kranebitter said.

Russia's top lender Sberbank (SBER.MM) paid 505 million euros in February for Austrian lender Volksbanken AG's (OTVVp.VI) eastern Europe arm VBI to boost its presence in emerging Europe. VBI is among the top 10 banks by assets in Bosnia, Croatia, the Czech Republic and Slovakia.

(Reporting by Michael Shields; Editing by Will Waterman)

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