The bank’s board of directors “has nothing to blame itself” – all loans for Signa are properly covered, Hypo Vorarlberg CEO Michel Haller explained in Bregenz on Tuesday. However, the actual number of failures is still unclear.
Following accusations that the bank had carelessly extended loans to the Signa Group, Hypo’s board went public on Tuesday, partially released from banking secrecy. CEO Michel Haller spoke about “complex issues” that had apparently been “incomplete” or even “misrepresented” in recent days. He wanted to counter that now. According to Haller, the bank had been in contact with the Signa Group since the 2000s. Project loans had already been granted and fully repaid.
In 2016, 2019 and 2021, loans were provided for three major real estate projects – for “Kurfürstendamm 231” in Berlin, Waltherpark in Bozen and “Mariahilf” (Lamarr) in Vienna. Haller emphasized that Hypo only appeared as a “minor partner” in these deals as part of a banking consortium; Hypo’s participation was only between 12.5 and 18 percent of the financing volume.
Regarding the allegations that Hypo would not appear in the land registries and therefore had no security, Haller explained that in such transactions only the leader of the syndicate appears – but on behalf of all banking institutions involved.
47.3 million for private foundation
In addition to these major projects, Hypo also participated in other deals with the Signa Group, for example for the “Chalet N” in Lech (secured with 20.8 million euros in liens) – in this case Hypo can also be found in the land register. Hypo is registered with two other projects with liens of 4.1 and 5.2 million euros. The loan for the ‘Family Benko Private Foundation’ amounts to 47.3 million euros and ten percent of the company’s shares were agreed as security. As Haller explained, the foundation’s balance sheet at the time of the loan decision in 2020 showed a result of 102 million euros. The share of debt capital was low. Haller admits that ‘good credit’ can also result in loans that are not secured at all, but that was not the case here.
Regarding the 131 million euros that have been repeatedly reported as ‘in default’ in recent days, the banker already explained last week that ‘in default’ should not be confused with ‘uncertain’. The Austrian National Bank’s statement from November 2022, according to which 61 percent of the Hypo Vorarlberg loan granted to the Signa Group at the time was unsecured, “we cannot understand,” Haller emphasized. He doesn’t know these numbers.
How big will the disruption really be?
How much money the bank will lose as a result of the various bankruptcies in the Signa bubble palace is still uncertain, because what the various liens, company shares, etc. actually yield, only becomes visible when they are sold. In any case, when asked on Tuesday, Haller claimed that the decisions regarding the Signa loans were justified at the time – even though, from today’s perspective, he would of course “rather not have granted” them.
In any case, he does not fear major financial consequences; the dividend is also insured.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
