A family affair

It has been a couple of intense months for both the banking and real estate industry in Austria and Central and Eastern Europe in general. Austrian banks and real estate developers, both known as firm believers in the potential of the region and for being big investors have had to start dealing with the consequences of their expansion policies. In 2009, Hypo Group Alpe Adria bank, Austria’s sixth-biggest lender, was nationalised. The bank’s rising loan losses in Eastern Europe had been threatening to bring it down. The bank, which was particularly exposed in Croatia, Bulgaria and Ukraine, closed last year with an annual loss of EUR 1.6 bln.Pricey optimismThe nationalisation of the bank did not bring any relief to the market, as other banks also announced losses related to their Eastern European exposure. Overall, banks in Austria have lent a total of EUR 186 bln to borrowers in emerging Europe. And that i