* State to get up to 49 pct stake in Volksbanken after
* Increased bank levy to offset state costs of bailout
* New owner for stake to be found by 2017 - Fekter
* Kommunalkredit Greek exposure poses next hurdle
(Adds quotes and background)
By Michael Shields
VIENNA, Feb 28 Austria aims to sell by
2017 the big minority stake in Volksbanken AG it will
get by rescuing the ailing lender in a bailout funded by fellow
banks, Finance Minister Maria Fekter said.
Austria would also have to help nationalised lender
Kommunalkredit sort out its Greek debt exposure this year, she
told reporters on Tuesday.
Austria will take a stake of up to 49 percent in Volksbanken
in a rescue that will cost the state more than 1 billion euros
($1.3 billion) in writedowns, fresh capital and guarantees.
Chancellor Helmut Faymann said a second bailout for
Volksbanken - it had already got 1 billion in state capital -
was cheaper than letting the lender go bust. A failure would
have triggered deposit insurance claims and state guarantees.
"We were talking about an overall risk of 13 billion euros,"
Faymann said after a cabinet meeting.
Losses on Greek debt and bad loans in eastern Europe have
hammered Volksbanken, once the country's fourth-biggest bank
which failed last year's European stress tests.
It forecast in November its 2011 loss would be at least 10
percent greater than the consolidated 500-750 million euros it
had expected only a month before.
The 62 regional banks that own a Volksbank majority are also
injecting fresh funds, while minority shareholders DZ Bank Group
, insurer Ergo and Raiffeisen Zentralbank
will see their stakes diluted sharply.
Ratings agencies have cited Austria's relatively large
financial sector as a risk to its sovereign debt rating.
Standard & Poor's has already stripped Austria of its AAA rating
and Moody's has said it might do the same.
FAIR IS FAIR
Austrian officials put the best face on taking a third bank
under the state's wing after the emergency nationalisations of
Kommunalkredit and Hypo Alpe Adria in 2008 and 2009.
Fekter said the bailout would have no impact on Austria's
drive to consolidate state finances because it would finance its
costs by increasing a special levy on banks it adopted in 2011.
Raising the bank tax by a quarter until 2017 is set to bring
in an extra 750 million euros.
Big Austrian lenders include Erste Group Bank,
Raiffeisen Bank International (RBI) and its unlisted
parent Raiffeisen Zentralbank, and Italian group
UniCredit's Bank Austria unit.
Most banks declined comment on the increased hit, which RBI
estimated would cost it around 20 million euros more a year.
"It is simply a matter of fairness that the sector that
benefits from stability in the financial sector also makes a
contribution," Deputy Finance Minister Andreas Schieder told
Austrian radio, adding competition among banks would prevent
them from passing the levy on to customers.
Shares in Austrian banks were mixed by 1240 GMT while
spreads for 10-year government bonds over benchmark German Bunds
were little changed at around 115 basis points.
Fekter reiterated that Austria was ready to stand by
Kommunalkredit as it digests losses on Greek debt holdings.
"We know that there are Greek securities at Kommunalkredit
and, in the course of its restructuring, Kommunalkredit will
also need money. Precautions have been taken for this and this
is something we will have to process this year," she said.
KA Finanz, the so-called bad bank split off from
Kommunalkredit, will likely need more help to handle writedowns
on its nearly 1 billion euros in Greek debt exposure.
Kommunalkredit Austria, the "good" part of the lender, has
said it could weather any hit on its Greek debt holdings without
more state aid.
The bank tax introduced last year aims to raise around 500
million euros annually. It is based on lenders' adjusted total
assets and ranges from zero for less than 1 billion euros assets
to 0.085 percent for assets over 20 billion.
(Additional reporting by Angelika Gruber; Editing by Mike
Nesbit and Dan Lalor)