Vienna - As the first large Austrian bank to apply for government aid, Erste Group Bank AG said Thursday it will receive 2.7 billion euros (3.5 billion dollars) of public funds to strengthen its capital base.

The percentage of the bank's debts covered by equity through the cash injection will rise to 10 per cent by the end of the year, compared with the previous estimate of 7.5 per cent.

In return for the government help, Erste agreed to provide credit worth 6 billion euros to commercial and retail customers over the next three years.

"We have a fundamentally sound position and are taking this step to better equip Erste Group to cope with a tougher economic outlook and to be able to fully support economic growth in Austria and of its trade partners in such an environment, " Erste chief executive Andreas Treichl said.

The participation certificates to be acquired by the state would ensure that Austrian companies would have access to liquidity, he said. (dpa)