The banking sector in Austria is well prepared in the event of a crisis, said Tuesday the Austrian finance minister, Maria Fekter.
"Banks must ensure they have sufficient capital base in a crisis," said Fekter, adding that countries must ensure, in turn, that can help financial institutions banking laws during a crisis.



Fekter's announcement comes after Monday, the Austrian Erste group reported that significantly reduce its exposure to peripheral eurozone states. Erste Group Executive Committee decided months a series of measures on the CDS portfolio assessment, the operations in Hungary and Romania and to the uniform application of the group effective interest method.



"Erste Group will amortize goodwill of the subsidiary part of Romania with 700 million before tax (EUR 627 million after tax) due to a slower economic recovery. This measure has no effect on the equity capital required or tangible . After preluareaparticipaţiilor minority shareholders (SIF) - as was announced September 14, 2011 - remaining goodwill will be supported by a significantly higher BCR possession, "the bank said.



Erste Group has significantly reduced exposure to Greece, Portugal, Spain, Ireland and Italy, from 1.9 billion at year-end euro 2010-0600000000 September 30. 95% of this exposure is assessed at 30 September 2011, at market prices. Meanwhile, total sovereign exposure Greece and Portugal fostredusă about 10 million. In addition, Erste Group changed the method for assessing the CDS portfolio (securities sold) the cost of depreciation in market price.



This will have a negative impact of 280 million euros on single equity for the years before the year 2011. The effect on profit or loss for the period January-September 2011 is about 180 million (after tax).



Following the application of those measures, Erste Group will report in the first nine months of the year 2011 a net loss of around 920-970 million euros. After adjusting for these extraordinary effects (excluding bank charges in Austria and Hungary), Erste Group estimates for the first nine months of 2011 net profit of 700 million. Strong profitability amid constant operational activity index Tier1 Core (total risk) of 9.2% of Erste Group in late 2010 is expected to remain unchanged at the end of 2011.



In addition, due to significant deterioration of economic prospects in the eurozone, but also as a precautionary measure, Erste Group will postpone by at least a year early repayment of state capital participation. Erste Group Executive Committee will propose the General Meeting of Shareholders may not distribute dividends for 2011, but to continue paying interest on capital participation, longer reads the Erste.