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Last year, Hypo Landesbank in Upper Austria paid 3.5 million euros to its owners: Land Oberösterreich, Raiffeisenlandesbank, OÖ Versicherung and Generali. 2.8 million euros would have been earmarked for this year. The state of Upper Austria would have received half of this. However, the Landesbank board of directors will propose to the annual general meeting that the dividend be eliminated, as CEO Thomas Wolfsgruber said yesterday when the 2019 balance was presented. “We follow the request of the regulatory authorities.” By suspending dividends, banks must remain strong.
The result of Hypo Oberösterreich would have justified a distribution: after taxes, an annual profit of 12.6 million euros was achieved in the last year. “In terms of operations, we have improved compared to 2018,” says Wolfsgruber, who has been managing the Landesbank alongside Christoph Khinast since February. The fact that the figures (net income for 2018: 15.8 million euros) do not reflect this is due to two unique effects: the sale of a recovery note from Heta in 2018 and the extraordinary effort of the sale of the stake at Salzburger Hypo. With a base capital ratio of 14.0 percent, Hypo is solidly positioned. The bank benefited from strong demand for credit, especially in private residential construction, and from a good securities business.
Provisions for unchanged credit losses
Provisions for credit losses at Hypo Oberösterreich are traditionally low due to its conservative business model (2019: € 8.5 million). Despite Corona, it would not have to increase: “Almost 73 percent of our financing volume corresponds to the residential construction sector,” says Wolfsgruber. Since the beginning of the crisis, clients have been accommodated with deferrals and bridge loans. “We are in the area of long-term investment. It doesn’t matter if a mortgage loan matures 20 years three or six months later.”
Articles of
Susanne Dickstein
Business editor
