SUPREME COURT DECISION: SWAP CONTRACT BETWEEN CITY OF LINZ AND BAWAG IS INVALID
VIENNA, August 29, 2022 – Today, the Austrian Supreme Court ruled in favor of the City of Linz regarding the contractual validity of the swap contract entered into between BAWAG and the City of Linz 15 years ago. BAWAG has firmly held to the belief that the contract was valid; however, today’s judgment of contract invalidity now clarifies one aspect of a prolonged legal case.
As a result of the ruling, BAWAG will be taking a full write-off of € 254 million related to the City of Linz
receivable on the balance sheet. This write-off will have no impact on our capital distribution plans, as the bank
has fully absorbed the impact in regulatory capital in prior years. No decision has yet been passed on the
mutual claims; however, BAWAG will pursue damage claims against the City of Linz in the absence of a
reasonable settlement.
“Unfortunately, the Austrian Supreme Court has ruled that the contract with the City of Linz was deemed invalid. It is now time to turn the chapter and look to the future. I hope that reasonable parties come together and settle outstanding damages tied to this contract”, comments CEO Anas Abuzaakouk on today’s ruling of the Austrian Supreme Court.
Press Release (PDF)
