Bank Austria sets aside $336m

Bank Austria sets aside $336m

VIENNA (Bloomberg): Bank Austria AG, the country's largest
bank, said yesterday it set aside 4.2 billion schillings (US$336
million) as of June 30 to cover possible bad loans in Russia and
Indonesia.

The statement came as emerging market stocks and bonds tumbled
as concern increased that Russia will have to devalue the ruble
and as currencies weakened in Asia, where economic recessions are
deepening.

"Bank Austria feels comfortable with the provisioning level in
general and in particular that of emerging market exposures," the
bank said.

"An aggravation of the situation in the emerging markets would
not substantially impact the Bank Austria Group."

At the end of June, the bank's Russian loans amounted to 13.3
billion schillings, of which only a small portion was ruble
denominated, the bank said. It made provisions of 2.9 billion
schillings for its loans to Russia.

In Indonesia, the bank's exposure amounted to 5.3 billion
schillings at the end of June, and it made provisions of 1.3
billion.