Bank Austria Expects Positive Results
In spite of high losses in the third quarter, the subsidiary of the Italian UniCredit forecasts slight, but positive results.
Due to the profitable fourth quarter, Bank Austria will close the current financial year with a small profit, CEO Willibald Cernko says. In the third quarter, Bank Austria had to report losses reaching € 600m. This was caused by high write-offs of subsidiaries in Ukraine and Kazakhstan. Moreover, Greek government bonds had to be written off too. After the first nine months, profits only reached € 4.5m.
According to Cernko, the second quarter of 2012 could bring positive surprises. However, it would remain difficult to succeed. Moreover, clear rules by European politics are needed now. Cernko criticizes politicians to not have learned from the euro- and debt crisis. Cernko underlines not to worry about Italian government bonds held by UniCredit and Bank Austria. Cernko states that the write-offs do not affect the capital base.
Cernko emphasizes that the capital increase for the holding company UniCredit, which totals € 7.5bn, brings clarity for the future. It would be an advantage to be the first mover. Once more, Cernko denied that Bank Austria could be sold by UniCredit: “We are a fixed, essential and integral part of the Group.” Besides that, UniCredit does not withdraw capital from Vienna. “By contrast, the capital remains here. We fulfill the capital requirements without any problems.“ For Cernko, trust in UniCredit is “unbroken”. The core capital quota of 10% can be succeeded easily, the capital requirements given by EBA would be correct.