UPDATE 1-Austrian state lender Hypo Alpe Adria loses 1.86 bln euros
* Net loss 1.86 bln euros under IFRS vs 23 mln loss in 2012
* Risk provisions and writedowns leap to 1.66 billion
* Balance sheet shrinks under EU-mandated reorganisation (Adds details and background)
VIENNA, April 16 (Reuters) - The net loss at nationalised Austrian bank Hypo Alpe Adria swelled to 1.86 billion euros ($2.57 billion) in 2013 from 23 million a year earlier as risk provisions and writedowns leapt to 1.66 billion euros, it said on Wednesday.
Hypo had said last week it expected to report a record net loss of about 1.9 billion euros for 2013 under IFRS accounting rules.
The bank, which Austria had to nationalise in 2009, was expected to have made large writedowns on its Balkan banking network - which it expanded at breakneck speed over a decade and which is now up for sale - as well as on its Italian operations.
Hypo has received around 5.5 billion euros in state aid since 2008 and has said it needs around 700 million more to prop up its balance sheet before putting about 18 billion euros worth of assets into a "bad bank" later this year.
Hypo's balance sheet shrank by 7.6 billion euros to 26.2 billion at the end of last year. Guarantees provided by its home province of Carinthia fell to 12.2 billion from 14.9 billion a year earlier.
Hypo's financial woes are set to push the state deficit to near 3 percent of gross domestic product and state debt to around 80 percent of GDP this year.
The state had considered letting it go bust as a way to get creditors to help pay for its wind-down costs, but bit the bullet last month and decided to adopt the bad bank plan.
Its chronic need for aid has triggered a popular backlash in Austria.
($1 = 0.7243 Euros) (Reporting by Michael Shields; Editing by Georgina Prodhan and David Evans)