NORD/LB makes provisions for risks arising from Hypo Alpe Adria commitment
NORD/LB is currently probing the impacts of the moratorium on payments imposed by Austria's FMA financial supervisory authority in respect of liabilities of Heta Asset Resolu-tion AG (Heta) which is responsible for the liquidation of Hypo Alpe Adria Bank's assets. The moratorium is set for the period ending 31 May 2016 and applies to and for all of Heta's liabilities.
The NORD/LB Group's claims against Heta amount to EUR 380 million in all and are af-fected in their entirety by the moratorium. EUR 245 million of this amount are in the port-folio of NORD/LB Group subsidiary Deutsche Hypo. All claims are subject to a deficiency guarantee furnished by the government of the Austrian state of Carinthia.
The securities in question were acquired in the period up to 2008. Rating agency Moody’s had rated these securities at Aa2 up to April 2010.
NORD/LB expects the State Government of Carinthia to honour the contractual obligations into which it entered when furnishing the deficiency guarantee. Furthermore, NORD/LB will make use of all available legal means towards enforcing its claims against the issuing institution and the state of Carinthia.
For precautionary reasons, however, NORD/LB will be setting up risk provisions for possible defaults in payment and will process corresponding value adjustments in the consolidated financial statement for 2014.
Even against this background, NORD/LB will nevertheless achieve its objective for 2014, namely a significantly better pre-tax result than in 2013.
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