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VBAG´s Executive Board Asked to Resign

Published: March 3, 2012; 12:26 · (FriedlNews)

Parts of the Volksbanken sector, which hold stakes in VBAG, offer resistance to the management board.

After the partial nationalization of VBAG, resistance against VBAG´s management board arises. Especially Volksbanken in Carinthia and Styria claim to change the complete board.

“It was a mistake that after Franz Pinkl again a primary banker entered the top of VBAG.” an insider told to “Kleine Zeitung”. The contract of CEO Gerald Wenzel will not be extended anyway. The Vice-CEO Michael Mendel could succeed Wenzel.

After the capital increase at VBAG was resolved, also contributions by the members of the cooperative were considered. The bank clarified that the capital increase may be carried out by the equity capital of Volksbanken.

In 2011, the situation of VBAG worsened dramatically. Losses reached € 1.4bn, which is due to write-offs in Investkredit and VBI Romania. VBI was sold to Russian Sberbank three weeks ago.  The initially expected price of € 585m could not be achieved, Sberbank only paid € 505m as further losses were observed since October. Furthermore, Greek sovereign bonds caused write-offs of up to € 200m.

The Austrian state granted new funds of € 250m and provided guarantees of € 100m. As a result, VBAG became partly nationalized. The state´s stake is 49%. The primary banks, the Volksbanken sector remained as majority owner. The Volksbanken sector expects profits of € 220m in 2012.