Running repairs
Short of money, a Bavarian bank sells part of its Austrian subsidiary
HYPOVEREINSBANK (HVB), Germany's second-biggest bank and Europe's biggest mortgage lender, is throwing out ballast to keep afloat. On July 8th it sold a quarter of its best-performing subsidiary, Bank Austria Creditanstalt, at euro29 ($33) a share, to raise around euro1 billion of much-needed capital. HVB thinks investors will be more interested in its operations in Austria and central Europe, which Bank Austria runs, than in the rest of its portfolio, which includes euro14 billion of non-performing loans. Does the sale make strategic sense, or is it just a desperate bid to prop up HVB's credit rating?
This article appeared in the Finance & economics section of the print edition under the headline “Running repairs”
From the July 12th 2003 edition
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