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A man with an umbrella passes the entrance of the headquarters of Austrian Erste Group Bank in Vienna June 24, 2013. Erste Group Bank said on Monday operating profit would fall as much as 5 percent in 2013 rather than holding steady and that it intends to raise its equity capital by about 660 million euros ($867 million) in the third quarter. Central and eastern Europe's third-biggest lender also said it would repay in the third quarter 1.76 billion euros in non-voting participation capital it got from the state and private investors after the financial crisis began.
A man with an umbrella passes the entrance of the headquarters of Austrian Erste Group Bank in Vienna June 24, 2013. Erste Group Bank said on Monday operating profit would fall as much as 5 percent in 2013 rather than holding steady and that it intends to raise its equity capital by about 660 million euros ($867 million) in the third quarter. Central and eastern Europe's third-biggest lender also said it would repay in the third quarter 1.76 billion euros in non-voting participation capital it got from the state and private investors after the financial crisis began.
(Leonhard Foeger/Reuters)

FINANCIAL TIMES

Europe’s banks slow to divorce their state partners

Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

They’re doing it in Vienna. They’re doing it in Brussels. They’re doing it in Stockholm and Frankfurt. They’re even thinking about doing it in London. Getting rid of state support is becoming fashionable in European banking this summer. Austria’s Erste Bank is the latest, promising to repay €1.2-billion ($1.7-billion) of participation capital, a hybrid instrument, held by the state. In March, Commerzbank said it would repay €1.6-billion of hybrid capital. Last week Sweden sold 6 per cent of Nordea, leaving it with a 7 per cent stake. And the U.K. government is agonising over how to sell its stakes in Lloyds and Royal Bank of Scotland.