• Taking into account all economic risks, FMA sets equity capital ratio at 12.04 per cent
• Bank views this as endorsement of consolidation strategy and will continue to pursue this strategy systematically
• Audit by the regulatory authorities recognises the progress made in improving risk-bearing capacity

Klagenfurt, 30 December 2011

The regulatory authorities have granted the Hypo Alpe Adria Group an extension until the end of 2012 to the deadline for fulfilling regulatory capital requirements. In so doing, the regulatory bodies have acknowledged the validity of Hypo Alpe Adria’s strategic approach, which is to reduce risk through downsizing and reprivatisation, and have recognised the potential for improvement in the group’s future risk-bearing capacity as a result of the fundamental overhaul of its risk systems. HAA must attain an equity capital ratio of 12.04 per cent at group level by 31 December 2012, taking into account all the economic risks faced by the banking group which is currently going through far-reaching restructuring measures. The Austrian Financial Market Authority (FMA) announced its decision in a communiqué to the bank. The bank’s regulatory equity capital ratio as at 30 November 2011 stood at 10.54 per cent.

In an initial draft decision dated 1 September 2011, the contents of which the bank communicated in an ad hoc announcement, the supervisory authority had proposed a deadline for fulfilling regulatory capital requirements of 31 March 2012. The extension which has now been granted acknowledges the successful reorganisation of the bank’s risk systems and the ongoing reduction in risk through the downsizing, disposal and restructuring measures taken.

The bank will continue to push forward with this consolidation strategy in 2012. The Austrian and Italian subsidiary banks are currently being made ready for divestment. In a next step, the subsidiary banks in South Eastern Europe will, in the course of financial year 2012 and in accordance with the mandate given by the owner, be made ready for reprivatisation. The exact timing of the sale of the subsidiaries will depend on market conditions.

The level of any actual capital requirement will be dependent on the success of the downsizing measures implemented, as well as the extent to which the burden on the bank is relieved through further progress in tightening up the bank’s risk systems, up until the target date of 31 December 2012.

The Chairman of the Executive Board of Hypo Alpe-Adria-Bank International AG, Dr. Gottwald Kranebitter, declared: “We view this notification as a mandate to continue to pursue our strategy both systematically and single-mindedly. In just one year we have completely reorganised the group, achieved significant improvements in our risk-bearing capacity and already taken steps towards a speedy reprivatisation of the bank. This is what we were mandated to do by our owner. In a difficult macro-economic environment we are taking the necessary steps to make a maximum contribution from our own resources in meeting the capital requirements laid down by the supervisory authorities. We are doing everything we can to bridge the shortfall in capital by the end of 2012 and fully expect the further progress made to be recognised by the FMA.”

Hypo Alpe Adria
Hypo Alpe Adria is an international banking and financial services group with around 320 banking and leasing locations in 12 countries (Austria, Italy, Slovenia, Croatia, Bosnia & Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and Ukraine), which has been in existence for more than 110 years. The ultimate group holding company for Hypo Alpe Adria is Hypo Alpe-Adria-Bank International AG, which is headquartered in Klagenfurt (Austria). The Federal Republic of Austria owns 100% of the shares in Hypo Alpe Adria. Within Hypo Alpe Adria, there are currently around 8,000 employees serving more than 1.2 million customers.

Contact for media enquiries:
Hypo Alpe-Adria-Bank International AG
Spokesperson
Mag. Dominic Köfner, CIRO
Telefon: +43 (0)50202 2050
Fax: +43 (0)50202 72 3000
dominic.koefner@hypo-alpe-adria.com
www.hypo-alpe-adria.com