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Austrian Banks Cut Exposure in Spain

Published: June 11, 2012; 15:25 · (Vindobona)

Erste Group, Raiffeisen Bank International (RBI) and KA Finanz have the highest exposure among Austrian banks.

Austrian Banks Cut Exposure in Spain / Picture: © www.map-of-spain.co.uk

As most European banks, Austrian banks reduced their exposure in Spain. According the BIS (Bank of International Settlements), the exposure held by Austrian banks totaled € 3.5bn at the beginning of 2012. Two years ago, the exposure stood at € 7.0bn. Also in the last few months, loans and bonds were reduced by several hundred million euros. German banks are much more engaged in Spain. Their exposure reached € 113bn.

The biggest exposure has the nationalized bank KA Finanz. At the end oft he first quarter, the Spanish exposure reached € 831.7m. The largest part of these assets are credit default swaps. At least, CDS were reduced by € 400m in the first three months of 2012.

Most other banks gave credits to enterprises or banks in Spain. Erste Group recorded a Spanish exposure of € 735m at the end of March. Only € 6m of these assets are bonds. However, Erste Group is the second-biggest shareholder of the Spanish savings bank Caixa Bank: Erste Group holds 9.7%. At the moment, Caixa Bank shows solid results.

RBI´s exposure amounted to € 639m, which is by € 150m less than in 2011. RBI´s exposure mainly consists of company loans (€ 500m). Bawag lent € 209m to Spanish banks and holds Spanish sovereign bonds of € 12m. VBAG´s exposure totals € 150m. UniCredit´s subsidiary Bank Austria´s engagement in Spain is negligible.