The Austrian Financial Market Authority (FMA) has issued an administrative decision today, in which it determines that the operations of KA Finanz AG as a wind-down entity under the Recovery and Resolution of Banks (BaSAG; Bundesgesetz über die Sanierung und Abwicklung von Banken) have been completed. KA Finanz AG had previously notified the FMA that all banking transactions had already been resolved, and that with the residual amount of € 146.7 million there were adequate liquid means available to satisfy all existing and expected future liabilities, although further liquid means of € 300 million will be available for the period after the planned liquidation period due to contractually agreed inflows in 2024 and 2025.
On 17.10.2023, KA Finanz AG’s general meeting passed the resolution on dissolution, and appointed Thomas Kainz LL.M as the liquidator under company law. Due to ongoing legal procedures the entity’s entry in the Commercial Register (Firmenbuch) is expected to be expunged in 2030.
The resolution and recovery regime has paid off
KA Finanz AG was created by means of a demerger from the predecessor entity Kommunalkredit Austria AG, which had fallen into financial difficulties during the course of the Global Financial Crisis in 2008, that was required to be nationalised to stabilise the situation. As a “bad bank” its predecessor’s problematic liabilities were bundled and were liquidated in an orderly manner in a value to conserve as much of their value as possible. The “good bank“ – the restructured Kommunalkredit Austria AG, was able to be reprivatised in 2015. As a result of KA Finanz AG ending its operations as a wind-down unit, after HETA Asset Management AG, the resolution entity of the former Hypo Alpe Adria Group, and IMMIGON AG, the wind-down entity of ÖVAG (Österreichischen-Volksbanken AG), KA Finanz AG has become the third and final orderly restructuring and resolution of a bank that was distressed during the Global Financial Crisis to have been concluded successfully.
“The new regime for the orderly restructuring and resolution of banks that was created in light of the immense challenges of the Global Financial Crisis has proven itself in practice, and in the meantime has even been expanded into a European system. The array of tools that we have at our disposal today are to be deployed efficiently and effectively, and allow a quick and coordinated intervention, thereby on the one hand ensuring financial market stability, while on the other hand also permitted restructuring, recovery or resolution to be conducted in a manner that conserves as much value as possible,” remarked the FMA's Executive Directors, Helmut Ettl and Eduard Müller.
The administrative decision ending KA Finanz AG’s operations as a wind-down entity pursuant to Article 84 para. 12 BaSAG can be downloaded in German only from the FMA website at: https://www.fma.gv.at/en/resolution-in-general/edicts-and-announcements/ka-finanz-ag-bescheid/.
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