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Austria mulls sale of nationalised Kommunalkredit
August 5, 2014 / 9:02 AM / 3 years ago

Austria mulls sale of nationalised Kommunalkredit

VIENNA, Aug 5 (Reuters) - Austria may take another crack at selling Kommunalkredit after failing last year to reprivatise the public-sector finance specialist which it nationalised in 2008, the bank said on Tuesday.

Posting an 8.4 million euro ($11.3 million) first-half net profit under IFRS accounting rules after a year-ago loss, it noted the European Commission had last year authorised a sale of up to half the bank’s assets as of July 2013, or up to 5.8 billion euros. It now has total assets of 12.4 billion.

The FIMBAG agency that oversees Austrian state stakes in banks “is in charge of reviewing the potential implementation of such a transaction”, Kommunalkredit said in a statement.

Reuters reported last week that such a sale might come, citing people familiar with the matter.

Kommunalkredit’s sale was originally due to close by mid-2013 but the offers Vienna got last year proved unacceptably low in a tough market for selling bank assets, forcing Vienna to miss a deadline set by EU regulators in Brussels.

That meant the Commission had the right to appoint a trustee to sell the bank, but Austria asked Brussels not to take that step and in return Kommunalkredit stopped making new loans.

Chief Executive Alois Steinbichler told reporters he did not foresee the need for any more state aid to either Kommunalkredit or KA Finanz, the “bad bank” spun off to absorb its toxic assets.

$1 = 0.7453 Euros Reporting by Michael Shields; Editing by Louise Heavens and David Holmes

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