* Plan would boost capital, avert more state aid
(Adds details and background)VIENNA/FRANKFURT, Oct 13 (Reuters) - Oesterreichische
Volksbanken (OTVVp.VI), the Austrian lender that failed this
year’s European stress test, plans a reorganisation to shore up
its balance sheet and avert the need for more state aid, sources
said.Vienna-based Volksbanken aims to form a mutual liability
association with its main regional bank shareholders, four
sources familiar with the matter said.The bank’s supervisory board was meeting on Thursday evening
to discuss the plan, a source at one of the bank’s owners said,
as did financial sources. If approved, it would let Volksbanken
consolidate the regional banks’ capital while keeping them
separate entities.”This is being discussed intently,” one financial source
said, adding the partners were using Dutch lender Rabobank as
model for the plan.”This strengthens the capital situation of each individual
bank so you are more safely positioned for a crisis.”Volksbanken, Austria’s fourth-largest bank, which got 1
billion euros ($1.37 billion) in state aid during the financial
crisis, declined to comment.Volksbanken has been at the centre of attention given its
relatively weak finances. It has been trying to use asset sales
to shore up its balance sheet and comply with Basel III capital
rules.But it got less than it wanted for selling its VBI eastern
European arm to Russia’s Sberbank and has been
unable so far to sell its minority stake in Raiffeisen
Zentralbank as planned.In April it had said its main shareholders would chip in
money to help repay the 300 million euro aid tranche due this
year, but that plan has yet to pan out.Volksbanken has issued a profit warning and said it was
unlikely to make 2011 payments on shares and hybrid or
supplementary capital.A failure to make the repayments would give Austria the
right to convert state aid into equity and nationalise the bank,
a step Finance Minister Maria Fekter says she would prefer not
to take.Regional volksbanks own 60.8 percent of Volksbanken,
Germany’s DZ Bank Group owns 23.4 percent, Victoria Group 9.4
percent, Raiffeisen Zentralbank 5.7 percent, and others 0.6
percent.
($1 = 0.730 Euros)
