Austria's Hypo on track for nationalisation

Austria was on track on Sunday to take over a majority stake in stricken bank Hypo Group Alpe Adria after key shareholder BayernLB raised an offer to help rescue the lender, two sources close to the talks said. A rescue package led by the Austrian government would avoid the collapse of Austria's sixth-biggest bank, which is also a major lender in the former Yugoslavia, under up to $2.5 billion of writedowns and loan losses this year. "The chances for this are above 50 per cent," said one of the sources, cautioning that the Austrian government was still reviewing BayernLB's offer and no deal was finalised yet. "It looks as if there is movement." The sources declined to give details of the deal. Austria's finance ministry declined to comment. BayernLB's offer came after three days of crisis talks in Austria's finance ministry and after the European Central Bank (ECB) and Germany's Bundesbank twisted arms in Austria and the German state of Bavaria, BayernLB's owner, the sources said.