Hypo Alpe-Adria-Bank International AG, a nationalized Austrian lender, hired Deutsche Bank AG (DBK) to manage the sale of its business in the former Yugoslavia.
Hypo Alpe is seeking at least the book value of 1.5 billion euros ($1.9 billion) for six banks in Croatia, Serbia, Slovenia, Montenegro and Bosnia and Herzegovina, Chief Executive Officer Gottwald Kranebitter told reporters today in Vienna. A short list of bidders should be drawn up before the end of this year as Klagenfurt-based Hypo Alpe is under pressure to show it is meeting conditions for the state aid it received, he said.
“We want to show both our owner and the European Commission that we stand by our goals,” Kranebitter said. “A true success would be if we didn’t need to be a bigger burden on the taxpayer, which means to get the book value.”
Together, the lenders equate to the third-biggest bank in the former Yugoslavia, after UniCredit SpA (UCG) and Nova Ljubljanska Banka d.d, and Hypo Alpe wants to sell them as a network along with the Austrian head office. The bank is selling off its assets as the European Commission investigates whether its 2009 bailout amounted to illegal state aid.
“The usual suspects” in Russia, Turkey, Southeast Asia and the European Union are potential bidders for the lenders, Kranebitter said, without elaborating. “Someone who has an interest in this market of 20 million people as a bank but also to accompany their region’s exporting industries” would be a probable bidder, he said.
“Since most western European banks are careful when it comes to risk-taking, this leaves us with Russian banks, such as Sberbank or Moscow Bank,” said Damir Novotny, a Zagreb-based analyst at Technology & Management Consultants.
Sberbank Deputy CEO Sergey Gorkov has said Russia’s biggest lender isn’t interested in buying Hypo Alpe’s assets.
Lenders including Oesterreichische Volksbanken AG (VBPS), KBC Groep NV (KBC) and Allied Irish Banks Plc (ALBK) have sold their eastern European units over the past two years to meet conditions for state aid, opening the fast-growing market for lenders new to the region such as Banco Santander SA (SAN) and OAO Sberbank. (SBER) Dexia SA (DEXB) is selling its Turkish lender Denizbank AS. (DENIZ)
Austria took over Hypo Alpe in 2009 to avert its collapse after former owners, including Bayerische Landesbank, withdrew their support. It received 1.35 billion euros in state capital in 2009 and 2010, as well as a 200 million-euro guarantee. The government wrote off 700 million euros of that in last year’s budget.
Almost a third of Hypo Alpe’s loan book is overdue or in default and was placed into a “wind-down” unit to make it easier to sell the operating units, which also include an Austrian and an Italian bank.
Hypo Alpe’s unit in former Yugoslavia reported a post-tax profit of 18 million euros last year, after a 117 million-euro loss in 2010, as provisions for bad debt declined by more than half. Kranebitter expects to exceed that profit this year.
“We continue to fight for customers, build up more deposits and selectively open branches here or there, because only a living company has a value for investors,” he said.
The economies of the former Yugoslavia, which also include Macedonia, are struggling to avoid a second recession in three years as Europe’s debt crisis damps demand for their exports and makes their mostly western-owned banks reluctant to lend.
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