EANS-Adhoc: Österreichische Volksbanken-Aktiengesellschaft / Reorganisation of the Association of Volksbanks

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other 02.10.2014

Subtitle: Splitting up VBAG will ensure the future of Volksbanks under new structures and will avoid any further burden on taxpayers

The Executive Board of Österreichische Volksbanken-AG (VBAG) decided in principle today to restructure VBAG. Those assets and tasks that are currently allocated to VBAG's non-core business areas are to be fully liquidated. Assets and service units belonging to the core business, together with all tasks undertaken by VBAG in its capacity as the central organisation of the Association of Volksbanks, are to be merged into a new top institution of the Association.

VBAG's objective is to deal swiftly with all remaining transactions that are not part of the core business, to meet its liabilities to creditors on the relevant maturity dates and to avoid any additional burden on taxpayers.

The concrete plan together with the relevant legal aspects will be worked out in more detail over the coming weeks. Final implementation will require official and supervisory approval.

New structure for Volksbanks A meeting of all cooperative bank members of the Association of Volksbanks took place today; there was a large majority in favour of implementing a fundamental restructure and accepting the "9+3" structure model with more than 95%. Small and medium-sized banks will merge together to form nine strong regional banks that will cooperate closely with one another in future. These will be augmented by three specialist institutions.

The purpose of this package of measures is to significantly strengthen the profitability of Austrian Volksbanken and to make it possible for them to raise funds on the capital markets.

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(END) Dow Jones Newswires

   October 02, 2014 11:26 ET (15:26 GMT)- - 11 26 AM EDT 10-02-14