May 20, 2014 / 11:38 AM / 4 years ago

Austria's Hypo to get supervisory board this week

VIENNA, May 20 (Reuters) - Ex-Dresdner Bank chief Herbert Walter will get a new supervisory board for nationalised Austrian bank Hypo Alpe Adria this week, the Austrian finance ministry said on Tuesday.

Finance Minister Michael Spindelegger said Walter needed a new team to tackle the ailing bank’s problems with a fresh eye. He had named the veteran German banker and restructuring expert as the future chairman in March.

Hypo, which was nationalised in 2009 after a decade of over-ambitious expansion in the Balkans pushed it to the brink of bankruptcy, has cost Austrian taxpayers more than 5 billion euros ($6.86 billion) in state aid so far.

The costs of winding it down are estimated at another 4 billion euros this year, pushing Austria’s public debt to a record 79.2 percent of gross domestic product and delaying its plan to return to a structurally balanced budget.

“A new team should tackle the new chapter in Hypo’s history,” Spindelegger said in a statement. “The new team should go approach the challenge of its task with a fresh perspective, impartially and without being influenced by politics.”

He said the four current members of Hypo’s supervisory board, not including labour representatives, would step down as Hypo prepared to transfer its 18 billion euros of toxic assets into a bad bank.

The new board members will be named on Friday.

Walter will replace Rudolf Scholten, the bank’s caretaker chairman since February, when ex-central banker Klaus Liebscher threw in the towel over continual, public criticism of how the bank was run and plans for its future.

Liebscher took over last June from Johannes Ditz, who quit over differences with the government over the bank’s strategy. ($1 = 0.7289 Euros) (Reporting by Georgina Prodhan; editing by Susan Thomas)

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