By Monica Houston-Waesch
Germany's NordLB said it could be affected by an Austrian
decision to halt debt repayments from bad bank Heta Asset
Resolution, by as much as 380 million euros ($402 million).
That is the total amount of exposure NordLB has to Heta, with
EUR245 million of that amount parked at its unit Deutsche Hypo,
NordLB said in a statement. The full amount of the exposure is
guaranteed by Austria's Kaernten state.
"NordLB expects the federal state of Kaernten to meet all
contractual obligations," NordLB said.
NordLB will nevertheless make risk provisions and adjust the
value of the bank's results for 2014 accordingly, it added.
The bank said it will still have met its target of improving
pretax profit last year.
Austria's Financial Market Authority said this month that it
will halt debt repayments from nationalized Heta, the wind down
vehicle established to sort out the unwanted assets of defunct
lender Hypo Alpe Adria. The regulator previously discovered a
EUR7.6 billion ($8.08 billion) capital gap on EUR18 billion of
assets.
Regionally-owned Bayerische Landesbank has EUR2.35 billion in
unsecured credit lines outstanding to Heta and therefore has the
largest exposure of all German banks, according to ratings firm
Fitch.
Write to Monica Houston-Waesch at
monica.houston-waesch@wsj.com