An unexpected delay in selling nationalized Austrian lender Hypo Alpe Adria's [HAABI.UL] Balkan network is no cause for alarm, the country's markets watchdog said on Wednesday, stressing the business was well funded and capitalized.
Hypo agreed in principle to sell the asset to U.S. private equity group Advent and the European Bank for Reconstruction and Development, but Austria re-opened the sale to other bidders last week, pushing any deal back into 2015.
The delay came days before an independent panel blasted Austria's handling of Hypo, which has cost tax-payers billions of euros since it was acquired from BayernLB [BAYLB.UL] in 2009. It criticised supervisors' failure to head off the costly disaster.
Helmut Ettl, co-head of the Financial Market Authority (FMA), pointed out that negotiations in the "difficult" case of selling the Balkans network were continuing and the FMA had already signed off on a sale to Advent and the EBRD.
The European Commission has set a deadline of mid-2015 for a deal signing and end-2015 for closing, and Ettl acknowledged that a wind-down of the Balkan network was a possibility.
The network, last valued at 89 million euros ($110 million) on Hypo's books, comprises banks and leasing companies in Bosnia and Herzegovina, Croatia, Montenegro, Serbia and Slovenia. Asked whether those countries should be concerned, Ettl said:
"The situation is not so uncomfortable for those countries at the moment....(The network) is well ring-fenced, well capitalized and financing is assured."
Ettl and co-FMA head Klaus Kumpfmueller said they would see if the Hypo report exposed weak spots the FMA had not already addressed to strengthen its supervisory role.
"No one in Austria would accuse us today of being a toothless supervisor that does not look into things. The criticism we get now is rather to the contrary," Ettl said.
