July 18 (Reuters) – Austrian banks will require between 19 billion euros ($24.7 billion) and 35 billion in additional capital to comply with the new Basel III rules, UniCredit (CRDI.MI) unit Bank Austria’s chief executive said.
In addition to other proposed measures such as an Austrian bank tax, a financial transaction tax and European deposit guarantees, the new rules will burden the country’s banks by a total of 4.1 billion euros to 9.6 billion, Willibald Cernko told journalists, citing a report published by Bank Austria.
“On average, the domestic banks earned 5.8 billion euros in the past five years. With an assumed additional burden of 9.6 billion euros that would lead to a loss of 3.8 billion euros,” Cernko said.
The result would likely be higher fees for customers, stricter loan guidelines and thousands of job cuts, he said.
Banking supervisors published draft rules on Friday that will force banks around the world to build up extra capital in a boom, but gave no hint of what level of funds lenders would be required to hold. [ID:nLDE66F0MD]
Austria’s banks have a 28 billion euro capital buffer, with an average Tier 1 ratio that is 5 percentage points above the minimum requirement of 4 percent, Cernko said. But higher minimum capital requirements will require a bigger buffer.
Cernko also said he expects the country’s banks to come in at the top of the bottom third in Europe’s stress test of 91 banks. Results of the test are expected on July 23. [ID:nLDE6601T6]
Austria’s top six banks are Bank Austria, RZB [RZB.UL] (RIBH.VI), Erste Group Bank (ERST.VI), Volksbanken, BAWAG P.S.K. and Hypo Group Alpe Adria. (Reporting by Eva Komarek; Writing by Maria Sheahan; Editing by David Holmes) ($1=.7706 Euro)