Bloomberg News

Austrian Banks Said to Need 4 Billion Euros in Recapitalization

October 17, 2011

Oct. 17 (Bloomberg) -- Austrian banks may need as much as 4 billion euros ($5.5 billion) in additional capital as part of a Europe-wide recapitalization program, according to three people with knowledge of the situation.

The estimate is based on a “worst case” assumed minimum capital ratio of 9 percent for Erste Group Bank AG, Raiffeisen Bank International AG and Oesterreichische Volksbanken AG, said the people who declined to be identified because the plans are private.

The estimate is based on data requested by the European Banking Authority and also assumes a writedown of sovereign debt holdings to market prices, the people said.

Central banks and the Group of 20 finance ministers have set an Oct. 23 deadline for the delivery of a plan to avoid a Greek default and bolster Europe’s banks.

--Editors: Jon Menon, Stephen Taylor

To contact the reporter on this story: Boris Groendahl at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at cullen8@bloomberg.net


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