30. 07. 10. - 15:00

Erste Bank considers 2011 state aid payback

Erste Bank boss Andreas Treichl has revealed plans to pay back the 1.2 billion Euros in state aid next year.

Treichl said today (Fri) he was convinced that the bank was in a position to return all the money it has been supported with by the government since early 2009. The announcement comes after his pledge to return the state subsidies "in tranches before 2014".

The government coalition of Social Democrats (SPÖ) and People’s Party (ÖVP) decided after the global crisis kicked in to boost the country’s biggest bank with billions of Euros of taxpayers’ money. Around six billion Euros were handed over last year, with another 1.5 billion Euros transferred so far this year. SPÖ and ÖVP claimed this step was necessary to ensure the institutes do not collapse due to the credit crunch.

Treichl said today Erste Bank would be able to decided on when it returned the loaned 1.2 billion Euros in autumn when the European Union (EU) announced possible stricter financial market regulations.

Asked whether Erste Bank – Austria’s second biggest bank after Raiffeisenzentralbank (RZB) and ahead of Bank Austria (BA) – will return the state aid all at once or in tranches, Treichl said: "If we can manage to return it all at once, we will do so in 2011."

Erste Bank announced earlier this year when it presented its 2009 figures that Treichl’s overall annual salary was 1.484 million Euros, down starkly from the 3.3 million Euros before tax he was paid in 2007.

Treichl caused some controversy earlier this week by coming out in support of the introduction of a tax on assets as part of the SPÖ-ÖVP coalition’s bid to restore the state budget. The Erste Bank boss also revealed he backed higher land tax levels.

The government, which is at odds over most 2011 budget details, is expected to introduce a bank solidarity tax focusing on Austria’s financial institute’s net assets. SPÖ Chancellor Werner Faymann, who also wants to set up a levy on financial transactions, hopes to rake in an extra 500 million Euros a year with the bank tax.

The Austrian budget deficit soared from just 0.4 per cent in 2008 to 3.5 per cent last year.