* Der Standard: central bank sees Hypo needing 17 bln eur
* Says 6.2 bln eur is best-case scenario
* Austrian Central Bank denies such internal report exists
(Adds comment from central bank official, background)
By Georgina Prodhan and Michael Shields
VIENNA, Sept 12 Austria's central bank denied a
report on Thursday that it believed nationalised bank Hypo Alpe
Adria could need as much as 17 billion euros ($23
billion) in fresh state aid.
Der Standard newspaper had reported the figure as a
worst-case scenario, saying this came from an internal central
bank (OeNB) report on the troubled lender, which has already
received more than 3 billion euros from the government.
The Austrian central bank issued a statement denying the
report. "The OeNB asserts that no such evaluation from the OeNB
exists, nor could one seriously be carried out in light of the
current level of knowledge," it said.
Philip Reading, the central bank's director of financial
stability and bank inspections, told reporters the report did
not exist "in this form".
Speaking on the sidelines of a conference, he said that
while the central bank had always been aware of the risks posed
by Hypo it had not assigned probabilities to possible scenarios
for more state aid.
Hypo Alpe Adria, which was nationalised in 2009 after rapid
expansion in the Balkans, is trying to sell off assets and wind
down its other activities under a plan approved by the European
Commission this month.
Austria, which has already provided more than 3 billion
euros in state aid to the bank, said earlier this month the
sell-off could cost its taxpayers up to 5.4 billion euros in
fresh capital by 2017.
But Der Standard said the bill could be as high as 17
billion euros in a worst-case scenario, according to the central
bank, and would be at least 6.2 billion euros even if the
sell-off was completed next year.
The Austrian government, seeking re-election in a Sept. 29
parliamentary vote, aims to balance its budget by 2016 and has
said the Hypo disaster will not throw it off course or force it
to adopt austerity measures.
The gross domestic product of Austria, a country of 8.5
million people, was 307 billion euros last year.
Finance Minister Maria Fekter has resisted calls for Hypo's
toxic assets to be put into a state-owned "bad bank", hoping
instead to set up a privately-owned vehicle for its non-core
assets so its debts do not count as state debt.
Austria has also nationalised one other bank and
part-nationalised another, partly because of the heavy exposure
of the country's banking system to neighbouring emerging
According to Der Standard, the central bank considered there
was a 50 percent chance of Hypo needing between 10 and 11.5
billion euros in fresh capital - 7.5 to 9 billion between now
and 2014 and 2.5 billion afterwards.
It rated the worst-case scenario as 40 percent likely. In
this case, all of the 14 billion euros in guarantees provided by
the provincial government of Carinthia, the bank's former owner,
would fall due and the bank would sell its assets at a loss.
The most optimistic case had just a 10 percent likelihood in
the opinion of the central bank, Der Standard said.
Hypo has so far agreed to sell its Austrian operating unit
and has halted business at its Italian subsidiary. Its prime
asset, its Balkans network, must be sold by 2015.
The lender reported a loss of 860 million euros for the
first half of 2013.
($1 = 0.7518 euros)
(Reporting by Georgina Prodhan; Editing by David Holmes and