VIENNA, May 28 (Reuters) - Owners of part-nationalised Austrian bank Volksbank AG agreed on Thursday to a plan to wind up the bank, which failed last year’s health checks of big euro zone lenders.
Volksbank (VBAG) has said that the Association of Volksbanks, which groups VBAG with other regional banks, would in its current form be unable to reach the capital targets set by the European Central Bank.
Winding down VBAG by turning it into a “bad bank” will relieve pressure on the other regional lenders in the Association of Volksbanks that own 52 percent of flagship VBAG.
Chief Executive Officer Stephan Koren has said VBAG could be wound down without more aid from Austrian taxpayers, who have already put 1.35 billion euros into the part-nationalised bank. The state has a 43-percent stake after a 2012 rescue.
The bank lost 2 million euros in the first quarter.
It had said this month that the wind-down, which still requires approval by regulators and the European Commission, remained on track. It will relinquish its banking license and be split into good and bad parts on July 4.
Reporting by Michael Shields. Editing by Jane Merriman