VIENNA, April 9 (Reuters) - Nationalised Austrian bank Hypo Alpe Adria got an extra 750 million euros ($1.03 billion) of state aid on Wednesday when its sole owner - the Austrian government - approved a capital increase at a shareholder meeting, Hypo said.
Hypo had announced last week it would get the money as a first tranche of emergency aid to cover its capital needs and let it finalise its 2013 accounts. It also provides a cushion for the first months of this year.
Hypo, nationalised in 2009, said last month it would need a total of 1.43 billion more euros to cope with writedowns and maintain regulatory minimum capital levels until it transfers billions of euros worth of assets to a “bad bank” in September.
Hypo’s recurring capital shortfall prompted the European Central Bank last week to suspend the Austrian bank’s access to cheap ECB funding.
Even before the latest support Hypo had got 4.8 billion euros in state aid since a global financial crisis broke out in 2008, exposing that it had overreached during breakneck expansion at home and in the Balkans that pushed it to the brink of insolvency.
It is now trying to sell off its Balkan banking network and plans to put most of its remaining assets - around 18 billion euros’ worth - into the bad bank to be wound down over years, a step that will inflate state debt and deficits this year.
$1 = 0.7249 Euros Reporting by Michael Shields; Editing by Elaine Hardcastle