Austrian retail bank Bawag has announced a pre-tax loss of some E8.9 million for FY2005 just a day after it settled charges relating to the Refco scandal in the US. The closure of the accounting scandal paves the way for the bank to be sold.
The results were delayed by the need to settle the fraud case, under which Bawag was charged with helping to commit fraud over a period of years. US investigations into the Refco affair led to the discovery of a further, separate accounting issue involving derivatives trading undertaken by Bawag in the Caribbean, the Financial Times reports.
These scandals ultimately led to Bawag’s near bankruptcy, from which it was only saved by a E900 million guarantee from the Austrian government. This loan is likely to complicate the sale of the business, which is now set to proceed following the settlement of the fraud charges for E525 million.
However, despite the many challenges facing the Vienna-based bank, the Handelsblatt newspaper reports that German financial giant Allianz is a possible suitor, citing unnamed sources in the industry.