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Bank Austria: Sales Proceeds for Kazakh Affiliate Dropped

Published: December 2, 2013; 11:55 · (Vindobona)

Sales proceeds of Bank Austria’s Kazakh affiliate ATF Bank only came at € 294m which is significantly less than announced by the bank in the first half year.

Bank Austria: Sales Proceeds for Kazakh Affiliate Dropped / Picture: © Uni Credit Group Bank Austria

Bank Austria is facing a financial misadventure. In mid-2013, Bank Austria declared the sales revenues of Kazakh affiliate ATF Bank to come at US-$ 429m (around € 316m). However, the final sales price was determined at US-$ 400m, as published by the bank in its interim report on the third quarter. Initially, the bank expected sale revenues to come at around € 500m.

In 2007, Bank Austria bought the stake for ATF for € 1.6bn. Because of the strategically favorable location between Russia and China as well as the high amount of raw oil ressources, former head of Bank Austria, Erich Hampel, had hoped for economic growth. However, the buying-in turned out to be a mispurchase only. Shortly after the purchase, the economy burst and the subsidiary only generated losses and had to be supported with capital injections because of non-performing loans. ATF caused losses running into around two billions. Moreover the high good-will was written off continuously.

Because of several legal difficulties, the bank plans on withdrawing from Ukraine. Bank Austria spent around € 1.5bn on the acquisition of Ukrotsbank. According to CEO of UniCredit, Bank Austria’s parent company, Federico Ghizzoni, the market was currently assessed.

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