Reuters: Regulatory News: BAWAG PSK CEO rules out Volksbanken merger -paper

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BAWAG PSK CEO rules out Volksbanken merger -paper Aug 6th 2012, 06:59 VIENNA | Mon Aug 6, 2012 2:59am EDT VIENNA Aug 6 (Reuters) - The head of Cerberus Austrian banking unit BAWAG PSK ruled out having another run at a merger with ailing rival Volksbanken AG (OeVAG) , saying too much had changed since the last attempt at a deal failed. BAWAG Chief Executive Byron Haynes also told the Wirtschaftsblatt paper in an interview he expected his bank to take part in the next round of European bank stress tests and he had no plans to repay Austrian state aid for the time being. Haynes, who pulled the plug on merger talks in 2010 after Volksbanken's regional bank owners declined to become part of the discussions, said he could "absolutely not" imagine another try now that former colleague Stephan Koren was running OeVAG. "Stephan Koren has said he faces a restructuring that will last years, so for us OeVAG is not an issue," he said. Now 43 percent state-owned after a bailout, OeVAG and its regional owners have launched a mutual liability pact that binds them together, but Haynes said BAWAG's situation had also changed via its cooperation deal with Austrian Post. The accord gives it 500 branches rather than the 150 it had at the time of the initial merger talks, he pointed out. Haynes said he assumed BAWAG would take part in future bank stress tests in Europe because OeVAG has dropped out of the process. He called his bank's capital position "appropriate". Asked if BAWAG would repay next year 550 million euros in state aid it got during the 2008/09 financial crisis, he said: "No, because in times like this no bank can be overcapitalised." He also said he could not envision any situation in which BAWAG would put more capital into Hungarian bank MKB. Its MKB stake has fallen to 5 percent after BAWAG declined to take part in a capital increase this year. Link this Share this Digg this Email Reprints

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