Brussels, 02/07/2015 (Agence Europe) - On 2 July, the European Commission approved the amended restructuring plan of the Austrian bank Österreichische Volksbanken AG (ÖVAG) and of Volksbanken-Verbund (Verbund, association of co-operative banks).
The banking sector health check carried out by the ECB in 2014 showed a deficit of own funds in the order of €865 million for the cooperative banking sector. In June of this year, Austria notified the Commission of the amendments made to the restructuring plan initially approved in September 2012.
Under the changes, the 51 local banks of Verbund will be merged into 10 larger institutions. The core functions of ÖVAG as the central organisation will be transferred to Volskbank Wien-Baden and its non-core assets will be separated and placed into a 'bad bank' under the name of 'Immigon'. The Austrian state owns 43.3% of the shares in ÖVAG. The Commission finds that the plan will allow the new association of co-operative banks to return to long-term viability without the need for any additional public funding. (Élodie Lamer)