Austrian Times RSS FeedsLike the Austrian Times Facebook page!Follow us on Twitter!


Events for April
M T W T F S S
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 1 2 3 4
Add your event FREE

Today

Videos


BurgKino

Pub Quiz everyTuesday at Johnny's Pub

Popular in Austria


Cosmo&Nanu

Volksbank AG (ÖVAG) suffered losses of more than 1.3 billion Euros last year.

ÖVAG losses soar

Volksbank AG (ÖVAG) suffered losses of more than 1.3 billion Euros last year.

Bank officials announced yesterday (Thurs) that the Viennese finance institute sustained a loss of 1.34 billion Euros in 2011. The news means that the Republic of Austria is robbed of its chances to demand the one billion Euros of participation capital back which it poured into the struggling bank in the past years.

ÖVAG made losses of around 1.1 billion Euros in 2009 and 1.2 billion Euros the following year. The Austrian government coalition of Social Democrats (SPÖ) and People’s Party (ÖVP) decided to partially nationalise ÖVAG in February. The move will be finalised later this month.

The coalition’s decision means that the state is set to increase its stake in the ailing bank dramatically. Finance State Secretary Andreas Schieder of the SPÖ and ÖVP Finance Minister Maria Fekter agreed to raise Austria’s share to 43 per cent. At the same time, the bank’s capital will be increased through public funds to stabilise its position on the financial market.

ÖVAG is currently headed by Gerald Wenzel. The banker’s contract as CEO will not be extended, according to reports. This would mean that Wenzel – who lacked international experience on the financial sector before taking over as CEO three years ago – leaves the bank within the coming weeks. Former BAWAG PSK (BAWAG) manager Stephan Koren might become new boss of ÖVAG.

Wenzel succeeded Franz Pinkl who is blamed by business magazines for masterminding what allegedly turned out to be a poorly planned and careless expansion. ÖVAG headed eastwards as many other Austrian financial institutes several years ago. Soaring losses and plunging profits of its subsidiary banks in Eastern Europe (EE) forced ÖVAG to sell Volksbank International (VBI).

Russian bank Sberbank acquired all but one of the nine VBI sections shortly before the Austrian government decided to partially nationalise ÖVAG. Sberbank transferred 505 million Euros but refused to take over VBI Romania. Immense losses of the Bucharest-based institute, the revaluation of affiliate Investkredit and Greek government bonds and other factors led to ÖVAG’s loss of 1.34 billion Euros in 2011.

Bank Austria (BA) head Willibald Cernko recently welcomed the government’s plans to create a bank bankruptcy law. Cernko said the case of ÖVAG "is not a glorious chapter. The state should have got involved much earlier." The BA chief criticised for not being contacted by the government at any stage of the partial nationalisation of ÖVAG despite the need to fork out more in bank taxes.

Fekter made clear that the SPÖ-ÖVP government planned to partially compensate the state’s expenses caused by the troubles of ÖVAG through an increase of the bank solidarity tax. The finance minister said the plan was to rake in 625 million Euros in 2012 following last year’s bank tax income of 500 million Euros.

Austrian Times


Are you on Facebook? Like the Austrian Times on Facebook and win great prizes!


Cosmo and Nanu
ORF Watch

Related articles: EU

  1. Best of the bookshelf in May, part four

    » Panorama 2012-05-31

    A Harvard University professor’s book on the killing of Osama Bin Laden, a collection of funny experiences on planes and many more interesting releases are out now.

  2. Drachma reintroduction 'would mean social explosion'

    » General News 2012-05-31

    A renowned economist has warned from reintroducing the drachma in Greece.

  3. EC warns debt-ridden Austria

    » General News 2012-05-31

    Austria has been criticised for its high public debts.

more related articles tagged "EU"

Related articles: crisis

  1. Drachma reintroduction 'would mean social explosion'

    » General News 2012-05-31

    A renowned economist has warned from reintroducing the drachma in Greece.

  2. EC warns debt-ridden Austria

    » General News 2012-05-31

    Austria has been criticised for its high public debts.

  3. Property prices keep climbing

    » Business 2012-05-31

    A real estate expert has expressed concerns about property prices in Austria.

more related articles tagged "crisis"

Related articles: CEE news

  1. AUA under pressure as pilots quit

    » Business 2012-05-30

    The number of pilots and stewardesses leaving Austrian Airlines (AUA) because of the upcoming pay cuts is on the rise.

  2. Pay cuts scare off AUA pilots

    » Business 2012-05-29

    Dozens of pilots have left Austrian Airlines (AUA) in the past weeks, according to the loss-making carrier’s works committee.

  3. Austrian skiers create overnight stay record

    » Business 2012-05-29

    The number of winter season overnight stays by Austrians has reached a new record.

more related articles tagged "CEE news"

Tag cloud:
billion  BAWAG  planned  ndash  nationalise  Minister  headed  Austria  rsquo  Wenzel  Sberbank  international  Fekter  Cernko  financial  Ouml  government  bank  losses  Euros

Latest News

 

First hybrid buses in Vienna
Wiener Linien is adding it's first hybrid buses to its public transport operation in the next fortnight, in addition to the twelve electric buses introduced into the city centre.

Businesses look to boost trade with Pakistan
Austrian businessmen are increasingly looking to Pakistan as an attractive place to do business, according to an Austrian representative speaking in the Pakistani city of Karachi yesterday.

Playful panda bear cubs at Schoenbrunn Zoo
The latest additions to the panda enclosure at Schoenbrunn Zoo have been enjoying getting to know their toys.

Michael Glawogger dies whilst filming in Africa
The Austrian filmmaker Michael Glawogger has died whilst filming his latest documentary in Africa. He was 54-years-old.

Deal struck with America Movil over Telekom Austrian ownership
Telecom Austria will receive a 1 billion EUR boost in capital after the Austrian state agreed a deal yesterday with Mexican telecoms company America Movil to combine their shares in a co-ownership agreement.

What is on at Burg Kino this week? (25 April - 1 May)



This week at the Burg Kino on the Opernring the following films are showing:





Faymann warns against further Russia sanctions
Chancellor Werner Faymann has spoken out in support of moving away from additional sanctions on Russia.

What is on at Haydn Kino this week? (24 April - 30 April)
The following films are on at the English language cinema Haydn Kino on Mariahilfestrasse between 24 April and 30 April:

Gazprom to explore expanding pipeline in Austria
Russia could soon begin constructing their South Stream gas pipeline in Austria after meetings were held this week with Gazprom.

Poacher in Vienna shoots five deer with bow and arrow
A poacher is suspected to have killed five animals in Vienna using a bow and arrow, a hunting weapon that is forbidden throughout Austria.

 


Mala Vrata

The most popular stories –
last 7 days



Don't moan alone, the Ombudsman Investigates.

Why suffer in silence. Let off steam by letting our readers share your troubles. File your complaints about anything and everything here.

Our ombudsman David Rogers will try and help solve some of the problems from lazy civil servants through to incompetent companies – and at the very least the worst transgressors will end up in our weekly special report.


Austrian Zimmers