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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: El Canadiense who wrote (34138)	3/15/2009 11:53:39 AM
From: Crossy	Respond to of 37387

Aero, there is not much additional light to shed on. Eastern Europe is VERY heterogeneous. You cannot compare Slovakia, Poland, Czech Republic etc. with the Ukraine. For countries within the Eurozone there shouldn'T be any problem with the balance of payments. For countries outside of the EU, it will be a case of the IMF to provide support (Ukraine). For EU members outside the eurozone, there will be measures to be designed at the EU level if needed. Bottom line for Austrian Banks: these banks didn't do subprime-CDOs or anyhting like that. They lent money to businesses and consumers in Austria and abroad (Western, Eastern Europe) but of course this was secured lending with collateral at risk for the borrower. This was also "plain vanilla" or syndicated lending, not of the "securitized" kind that is plaguing US, British, Belgish, Dutch and some German banks (the "Landesbanken" in Germany) The impact will only be felt in two possible ways: if the loans were made in strong-currency denominated terms, then the default rates should icnrease - as in all such cases. If they were made in host-country currency terms, then of course would be a currency loss. Forget the "alleged meltdown" in any case. There is nothing of this looming at all. Even if 100% of all our bank loans would be impaired - and the government would have to step in - it would still leave Austria's toal public debt below the 100% figure - a level that at the present moment Italy already surpasses. There are additional tidbits to consider: Out "regional banks" Oberbank, BTV and BKS have very low level operations in Eastern Europe at all. They also have the lowest total equity leverage ofall our banks. Erste has 100% ownership of its Eastern-European portfolio. Volksbank also. RZB (Raiffeisen) - does NOT ! They own only a majority stake (not sure about the total amount !) of their Eastern operation (called Raiffeisen East). This should work to their advantage as any impairment wouldn't pull through completely to the top corporate level. Unicredit (Bank Austria) is interesting - as it can draw on capital support from trhee sources: Austrian TARP, Italian TARP and Ghadaffy buying similar participatory shares. The report is certainly correct in everything stated. The (unsecured) debt papers of Austrian Banks could be an interesting yield-opportunity this time. best to you CROSSY