URGENT-BAWAG PSK to repay rest of Austrian aid

VIENNA, March 13 Thu Mar 13, 2014 5:03am EDT

VIENNA, March 13 (Reuters) - Austrian lender BAWAG PSK will repay on Friday the remaining 350 million euros ($487 million) in capital it got from the state to ride out the financial crisis, it said, after shareholders injected more capital into the bank this month.

BAWAG, owned by investor Cerberus Capital Management , is one of six Austrian banks to come under direct European Central Bank supervision after stress tests this year. It is the subject of speculation it could be up for sale.

Its balance sheet was beefed up last year by a 200 million euro share issue that gave U.S. asset manager GoldenTree a stake of nearly 40 percent. Shareholders injected another 125 million euros in March, BAWAG said on Thursday.

BAWAG had a fully-loaded Basel III core equity tier 1 ratio of 9.4 percent of risk-weighted assets at the end of 2013 - easily surpassing minimum requirements and its own 9 percent goal - and said it aimed to boost that above 10 percent in 2014.

Despite higher restructuring expenses, its 2013 net profit more than doubled to 229.1 million euros thanks to sharp gains on financial instruments, a 5.1 percent drop in core operating expenses and a decline in risk costs by more than a third.

It targeted a return on equity above 10 percent this year, a rise in its Austrian market share for retail customer lending to 8.5 percent from 8 in 2013, and a cut in core operating expenses to below 500 million euros from 574 million in 2013.

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