Austrian Volksbanken skips coupon payment on state aid
FRANKFURT Nov 10 (Reuters) - Partly nationalised Austrian lender Volksbanken AG (OeVAG) is expecting to skip coupon payments for the next two years on state aid it received in the financial crisis.
The bank said in a statement late on Friday that according to local accounting rules it will post a 2012 net loss of less than 100 million euros.
"Due to the expected difficult economic environment and the resulting deductions on the run-down portfolio, interest payments on supplementary capital should not be expected for the years 2013 and 2014," it added.
Volksbanken was granted 1.25 billion euros in capital injections, 3 billion euros in liquidity guarantees and 100 million euros in asset guarantees as part of its bailout following adverse investments in eastern Europe, losses on Greek debt and other bad loans.
In April, Austria took a 43 percent stake in the lender as part of a rescue that cost the state more than 1 billion euros in writedowns on previous aid, fresh capital and guarantees.
The Austrian government said last month it will run bigger public deficits than hoped this year and in 2013 as the economy performs less well than expected and aid for its struggling banks eats into state finances.
Separately, Nationalised peer Hypo Alpe Adria is readying new state-backed hybrid bonds to shore up its balance sheet, sources close to the situation said earlier this month. (Reporting by Arno Schuetze; Editing by Toby Chopra)
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.