Frankfurt am Main, February 17, 2014 -- Bayerische Landesbank's (BayernLB) capital will come under pressure given the heavy losses of its Hungarian subsidiary and the need to set aside reserves to cover the risk of a legal dispute with its troubled former Austrian unit Hypo Alpe-Adria-Bank International AG (HAA), says Moody's Investors Service in a Credit Focus report published today. In addition, the bank is exposed to the risk of substantial losses should a restructuring of HAA include a bail-in of creditors. These factors coincide with BayernLB needing to repay EUR4 billion of state aid by 2019. Nevertheless, BayernLB's sound capitalisation provides some leeway, and Moody's expects it to meet its restructuring deadlines under its central and adverse scenarios.

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