Signa exposure of Austria’s banks more than €2 billion
Citing an insider, Reuters reports that the Signa Group has loans outstanding from almost all well-known Austrian institutions.
According to an insider, the ailing Signa Group has loans outstanding from almost all well-known Austrian financial institutions.The total exposure of financial institutions amounted to around €2.2 billion, a person with knowledge of the situation told the Reuters news agency, citing data from the middle of the year.The largest lenders to the trading and real estate company founded by Tyrolean investor Rene Benko are Raiffeisen Bank International (RBI), which has significantly reduced its commitment to Signa in recent years, and Bank Austria, which belongs to the Italian UniCredit.According to the data, these two financial institutions accounted for almost two thirds of the loan volume, according to the insider.
After discussions with ECB regulators, who are concerned about Signa Group’s prospects, the banks have decided to reduce their exposure to the real estate group, another insider said.The two banks declined to comment, citing banking secrecy.
The ECB, which directly supervises these institutions, also did not want to comment on the information.Signa could not immediately be reached for comment.
According to the insider, Signa’s other lenders with different levels of exposure include Raiffeisen Landesbank Niederösterreich-Wien, Raiffeisen Landesbank Oberösterreich and Erste Group.The banks declined to comment.
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In principle, Austrian banks do not see any excessive risks despite the crisis on the real estate market.“Our commercial real estate portfolio is really very solid,” said Erste Group head of risk Alexandra Habeler-Drabek at the end of October on the occasion of the third quarter results.A bank spokesman also pointed out that non-profit housing in Austria is an essential part of the commercial real estate business.
On commercial real estate in general, the RBI stated that its loan portfolio in this sector is highly diversified and backed by good collateral.In addition, the financed commercial properties would generate stable cash flows.The supervisory authority is also not particularly worried: “We do not see financial market stability at risk,” said a spokesman for the Austrian National Bank.The central bank and the financial market supervisory authority do not comment on individual institutions.
Benko hands over helm at Signa to renovation experts
In an earlier Signa presentation, which was available to Reuters, there are dozens of Austrian, German and Swiss banks, insurance companies and pension funds named as investors and financing partners.
Benko had on Wednesday after days of negotiations with the shareholders announced his resignation as chairman of the advisory board.He is handing over the helm to the German restructuring expert Arndt Geiwitz, who is now tasked with restructuring the group.
The Signa Group, which, in addition to prestige properties such as the Chrysler Building in New York, also owns the German department store chain Galeria, has been an important player in the European real estate industry for more than two decades.
The sector boomed for years when interest rates were extremely low.However, the industry is now having a hard time with dramatically more expensive financing and increased construction costs.Signa’s sports retail division recently filed for bankruptcy and construction of a skyscraper was halted after the developer stopped making payments to the contractor.The US rating agency Fitch also downgraded a Signa subsidiary to “high risk” and warned of risks of infection for other parts of the group.
How much capital is needed to stabilize the company is still unclear.
Benko said on Wednesday that Signa’s real estate portfolio was “unique.” He is absolutely sure that the company can have a very good future.He described his withdrawal as the best solution for the company, its partners, investors and employees.“It is now important to restore trust, and I want to make my contribution to that.”
REUTERS
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2023-11-11 02:20:16
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