Vienna - Applying Austria's bail-out plan for the first time, leading financial institutions and the government are stepping in to rescue Constantia Privatbank AG, which was faced with a liquidity crunch, the finance ministry said Friday.
Five major Austrian banks are set to take over 100 per cent of the private banking institution that was reportedly suffering from an outflow of capital as major customers shifted their funds to bigger institutions.
In addition, the banks decided to inject 400 million euros (538 million dollars) into Constantia, while the Austrian national bank will contribute 50 million euros.
As foreseen in the Austrian government's banking package, the state will guarantee the capital injection.