Brussels, 05/10/2012 (Agence Europe) - On 4 October 2012, the European Commission gave the go-ahead to a planned capital injection of €220 million for the Austrian public bank, Hypo Tirol Bank AG, struggling due to a depreciation of assets. The Commission says that the bank's restructuring plan ensures the bank's viability without state support and provides for a sufficient own contribution to the restructuring costs while minimising distortions of competition..
Hypo Tirol Bank is a regional bank which is fully owned by the Austrian Federal State of Tirol. Under the restructuring plan, the bank will in the future focus on its core market Tirol and withdraw from Germany and Italy (except Südtirol/Alto Adige). It has already withdrawn from Switzerland. Hypo Tirol will considerably reduce its balance sheet and commits, in particular, to limit certain types of loans and to do new business only above a certain profitability level. Moreover, Hypo Tirol will further strengthen its corporate governance by increasing the number of independent experts in the supervisory board. The bank commits that any decision as regards lending will solely be taken on the basis of market principles. Hypo Tirol pledges to pay dividends to its owner - the State of Tirol - once an appropriate core tier-1 ratio is reached. Such a pay-out will help limit the aid as far as possible.
In 2009, the Commission approved a guarantee granted by the Federal State of Tirol for Hypo Tirol of up to €100 million for the issuance of capital. The capital which was subscribed by private investors will be paid back and the guarantee will be paid back by end June 2013 at the latest. (FG/transl.fl)