Bad Bank for Hypo Group?

Professional ServicesBanks ♦ Published: June 8, 2012; 15:28 ♦ (Vindobona)

The nationalized Austrian bank Hypo Group Alpe Adria considers to create a bad bank in order to avoid further capital injections.

Bad Bank for Hypo Group? / Picture: © Wikipedia / JJ55 (30 March 2008)

Hypo Group, which was nationalized in 2009, still has a high non-performing loan quota. The total volume of non-performing loans amounts to € 10bn. As the bank and the Ministry of Finance want to prevent further capital injections, the creation of a bad bank is considered. However, this means that guarantees would become necessary. The potential costs for the taypayers are not…