The Austrian Financial Market Authority (FMA) in its function as the resolution authority has increased the write-down ratio by means of an administrative decision (Vorstellungsbescheid III (the third administrative decision in relation to the challenge procedure) for eligible liabilities of HETA ASSET RESOLUTION AG to 86.32%. In the second administrative decision in relation to the challenge procedure the write-down ratio was only 64.4%. To date, € 7.8 billion was already distributed to the creditors in two interim distributions. It is therefore to be expected that HETA will also propose a further substantial distribution to be made this year on the basis of this new administrative decision. On the basis of the current knowledge, the subordinate creditors will lose their entire claim of € 1.9 billion, while the haircut on the eligible liabilities of creditors will be € 1.7 billion, with the bail-in of creditors during the orderly resolution contributing around € 3.6 billion in total.
The new European resolution regime has proven itself
“As painful and costly as the failure of Hypo Alpe Adria as a banking group was, its orderly resolution as HETA under the new European resolution regime has kept the burden on the taxpayer as low as possible,” remarked the FMA’s Executive Directors, Helmut Ettl and Klaus Kumpfmüller: “Our new resolution tools have proven their effectiveness. Whereas the expert opinion in 2015 when the decision was taken about the resolution of HETA valued the available assets at € 7.1 billion, as a result of the orderly resolution in a manner that has preserved assets under the aegis of the FMA has already realised proceeds of more than € 10 billion.” To date approx. 85% of all assets have been disposed of and their value realised in cash. By the end of 2020 according to the plan, this value should be 99%.
Since responsibility was transferred to the FMA in March 2015, 115 out of the 168 companies within the group have already be resolved and liquidated. Headcount has been reduced at HETA AG during this period of time from approx. 550 to 190, and in the HETA network from 1,800 to approx. 400. Prior to resolution, while still Hypo Alpe Adria, the group employed around 7,200 employees, with around 4,200 in the group’s bank network in Southern and South-Eastern Europe.
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