UPDATE 2-Hypo Alpe Adria says will not need more capital
* H1 net loss 1.67 bln euros, including 1.44 bln provisions
* Last 700 mln euro capital injection now not needed
* Balance sheet 25.2 bln euros vs 26.2 bln at end 2013 (Adds Hypo comment that Hypo will not now need final capital injection of 700 million euros)
By Georgina Prodhan and Angelika Gruber
ALPBACH, Austria, Aug 27 (Reuters) - Nationalised Austrian lender Hypo Alpe Adria will not need any more state aid before being broken up later this year, with most of its assets to be put into a "bad bank."
The bank, which has already received around 5.5 billion euros in state aid since 2008, will not now need another 700 million euros (924 million US dollar) in state aid as originally agreed, a Hypo spokesman said on Wednesday.
He said this followed the introduction of a new law in July which imposed losses on some creditors.
Hypo was nationalised in 2009 after a decade of breakneck expansion in the Balkans. It shrank its balance sheet by a billion euros in the first half of 2014 to 25.2 billion euros from a high of 43.3 billion at the end of 2008.
About 18 billion euros worth of toxic assets are planned to be hived off into a "bad bank" later this year, and Hypo's prime asset, its Balkan banking network, is up for sale and likely to fetch a maximum of 500 million euros.
The aid Austria has pumped into the bank was set to push the country's state deficit to nearly 3 percent of gross domestic product and state debt to around 80 percent of GDP this year.
Hypo posted a net loss of 1.67 billion euros on Wednesday for the first half of the year, mainly due to provisions it had to make in preparation for the sale of its Balkan banking network and the winding down of its Italian business.
Provisions for the Balkan and Italian businesses in the first half of 2014 were 1.44 billion euros. (1 US dollar = 0.7579 euro) (Additional reporting by Michael Shields; Editing by Mark Potter and Jane Merriman)