Hypo Alpe-Adria-Bank (Italy)

Hypo Alpe-Adria-Bank S.p.A., commonly known as HBI or Hypo Italy, was an Italian bank headquartered in Udine and based operationally in Tavagnacco, in the Friuli-Venezia Giulia region. It developed from Finservice S.r.l., a finance-leasing company founded in 1986, and entered the Hypo Alpe-Adria group after being acquired in 1988 by Kärntner Landes und Hypothekenbank, the institution that later traded as Hypo Alpe-Adria-Bank. The Italian business was renamed Hyposervice S.r.l. and converted into a società per azioni in 1990. It became a bank in 1998. The institution formed part of Hypo Alpe-Adria-Bank International's expansion across Austria and Southeast Europe. Its Italian activities combined conventional banking with financing and leasing. Before its withdrawal, the bank operated a branch network concentrated in northern Italy, with locations in Veneto, Lombardy and Friuli-Venezia Giulia. The reference material records 19 branches immediately before closure in December 2016 and 26 branches at the end of 2014, reflecting the retrenchment and restructuring of the Italian business. The wider Hypo Alpe-Adria group was nationalized by Austria in 2009 after severe financial difficulties. The group was subsequently divided between a wind-down institution holding problem assets and entities containing assets considered capable of sale. In March 2014, the Italian banking subsidiary was separated from the group's bad-bank structure, while its leasing department remained in that wind-down perimeter. At the end of 2014, Hypo Italy was held by HBI-Bundesholding A.G., a Vienna-based sub-holding company connected to the Austrian government's restructuring arrangements. The separation was accompanied by a major board reconstitution. All directors other than the independent director were replaced, while several former senior officers were later fined by the Bank of Italy. Italian financial authorities also investigated the former leasing operation in relation to allegations that borrowers had been charged excessive interest. The bank's reported Common Equity Tier 1 ratio was 0.58% at 31 December 2014, below the Basel III reference requirement cited in the source material, underscoring the institution's capital weakness during the wind-down period. Hypo Italy pursued disposal rather than expansion in its final years. In 2016 it invited expressions of interest for its branches and performing mortgage portfolio. Banca Valsabbina subsequently acquired seven branches and a loan portfolio with a reported value of €150 million. Hypo Italy closed all of its remaining branches on 23 December 2016. The Italian leasing operation stayed within the bad-bank perimeter under the name Heta Asset Resolution Italia S.r.l.; that entity was later sold to a private-equity fund in 2016. By this stage, the Hypo Alpe-Adria-Bank Italy brand had ceased to represent a continuing retail banking network and was effectively part of an asset-resolution and liquidation process.

Hypo Alpe-Adria-Bank S.p.A. originated in 1986 as Finservice S.r.l., an Italian company focused on finance leasing. In 1988 it was acquired by Kärntner Landes und Hypothekenbank, the Austrian institution that later operated under the Hypo Alpe-Adria-Bank name. The Italian company was renamed Hyposervice S.r.l. and became a società per azioni in 1990. It obtained banking status in 1998, expanding its role beyond leasing into banking and credit services. The company became the Italian subsidiary of Hypo Alpe-Adria-Bank International, a group that developed an extensive presence in Austria and Southeast Europe. In Italy, its business was concentrated in the north of the country. Branches were located in Veneto, Lombardy and Friuli-Venezia Giulia, while the bank also maintained lending, mortgage and leasing activities. The registered office was in Udine and the operating headquarters were in Tavagnacco. The wider group encountered serious financial problems and was nationalized by the Austrian state in 2009. The subsequent restructuring sought to divide the group into a bad bank responsible for winding down troubled assets and separate entities containing assets that might be sold. In March 2014, Hypo Italy was separated from the bad-bank structure, except for its leasing department. The Italian bank was held at the end of 2014 by HBI-Bundesholding A.G., a Vienna-based sub-holding company associated with the Austrian government's ownership and restructuring arrangements. The 2014 separation involved a broad change in governance: every board member other than the independent director was replaced. Former chairman Johannes Leopold Proksch, former vice-chairman Rainer Sichert, director Lorenzo Snaidero and director Stephan Holzer were later fined by the Bank of Italy. In October 2014, the Guardia di Finanza also began investigating the former leasing department over possible excessive interest charges to borrowers. These regulatory and investigative matters formed part of the troubled legacy of the group's earlier operations. The bank's financial condition remained weak during the restructuring. Its Common Equity Tier 1 ratio was reported at 0.58% on 31 December 2014, below the Basel III requirement cited in the source material. The bank subsequently moved toward an orderly disposal of operations rather than continued network growth. In 2016 it sought expressions of interest for its branches and performing mortgage portfolio. Banca Valsabbina bought seven branches and a loan portfolio reported at €150 million. Hypo Italy closed all branches on 23 December 2016. The leasing activity that had remained within the bad-bank perimeter continued under the name Heta Asset Resolution Italia S.r.l., a subsidiary of Heta Asset Resolution. That company was sold to a private-equity fund in 2016. Hypo Alpe-Adria-Bank Italy therefore ended as a wind-down and asset-resolution case rather than as a continuing Italian retail bank.

1. 2016Branch and portfolio disposal

   Banca Valsabbina acquires seven branches and a reported €150 million loan portfolio; Hypo Italy closes all branches on 23 December.

   Source
2. 2014Italian subsidiary separated from bad-bank structure

   Hypo Italy is spun off from the bad bank, excluding the leasing department, and is placed under HBI-Bundesholding A.G.

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3. 2009Parent group nationalized

   The wider Hypo Alpe-Adria parent is nationalized by Austria following financial difficulties.

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4. 1998Becomes a bank

   The Italian operation receives banking status.

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5. 1990Corporate transformation

   The company is renamed Hyposervice S.r.l. and becomes a società per azioni.

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6. 1988Acquisition by Kärntner Landes und Hypothekenbank

   The Italian finance company is acquired by the Austrian bank that later trades as Hypo Alpe-Adria-Bank.

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7. 1986Finservice is founded

   Finservice S.r.l. is established in Italy as a finance-leasing company.

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A northern Italian banking and finance-leasing business within the wider Hypo Alpe-Adria group, ultimately repositioned from branch banking toward restructuring, portfolio disposal and wind-down.

• Retail and corporate bankingBanking services1998

  Hypo Italy operated as a banking institution serving customers through a northern Italian branch network. Its activities included general account-based banking and credit services, although the business was ultimately reduced as the parent group moved into restructuring and wind-down.

• Mortgage lendingLending

  Mortgage loans formed part of the Italian bank's performing asset base. During the 2016 restructuring, the bank sought buyers for its performing mortgage portfolio rather than retaining it as part of an ongoing branch-led banking strategy.

• Finance leasingLeasing1986

  Finance leasing was the original business of Finservice and remained an important legacy activity. The leasing department was excluded from the 2014 separation of Hypo Italy and stayed within the bad-bank perimeter, later operating as Heta Asset Resolution Italia S.r.l.

• 2016Dispose of branches and performing mortgage assetsM&A

  The Italian operation was being wound down and sought to reduce its branch and asset footprint.

  What changed. Hypo Italy invited expressions of interest, and Banca Valsabbina acquired seven branches and a reported €150 million loan portfolio.

  Aftermath. All Hypo Italy branches closed on 23 December 2016.

  Loan portfolio acquired by Banca Valsabbina. €150 million (2016)

  Source
• 2014Separate Hypo Italy from the bad bankStrategy

  The Austrian-owned Hypo Alpe-Adria group was being divided between a wind-down institution and entities holding potentially saleable assets.

  What changed. Hypo Italy was spun off from the bad-bank structure in March 2014, while the leasing department remained within the wind-down perimeter.

  Aftermath. The subsidiary became part of a separate holding structure, but its weak capital position and operating legacy continued to drive restructuring.

  Common Equity Tier 1 ratio. 0.58% (31 December 2014)

  Source

• 2014Regulatory fines involving former directorsControversy

  The Bank of Italy fined former chairman Johannes Leopold Proksch, former vice-chairman Rainer Sichert, director Lorenzo Snaidero and director Stephan Holzer.

  Source
• 2014Investigation into possible excessive interest chargesControversy

  The Guardia di Finanza investigated the former leasing department over possible overcharging of interest to borrowers.

  Source

• 2016Hypo Italy seeks buyers for branches and performing mortgages

  The bank invited expressions of interest for its branch network and performing mortgage portfolio as part of its restructuring and disposal process.

  M&A
  Source
• 2016Banca Valsabbina acquires seven Hypo branches

  Banca Valsabbina acquired seven branches and a loan portfolio reported at €150 million from Hypo Italy.

  M&A
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• 2016Hypo Italy closes its branch network

  All remaining Hypo Italy branches closed on 23 December 2016, marking the end of the bank's Italian branch operation.

  Other
  Source
• 2014Italian subsidiary separated from Hypo Alpe-Adria bad bank

  Hypo Italy was spun off from the group's bad-bank structure, while its leasing department remained in the wind-down entity. The board was substantially replaced during the separation.

  Leadership change
  Source

1. Hypo Alpe-Adria-Bank (Italy)