Hypo Alpe Adria Group - Guidelines and Methods of Business - The Case of Argentum D.O.O

Hypo Group has been operating in eight countries of the Alps-Adriatic region, with a basic goal to encourage prosperity of the region by strengthening local economies. In 2006 it signed a Loan Agreement with Argentum d.o.o company from Mostar, Bosnia and Herzegovina. Within this process, at the bank's request, the ownership structure changed in a way that the founder transferred 33% of stock without compensation to the bank's affiliated company. With a time distance and the analysis of general business conditions, this process included a range of activities evading the Austrian and B&H legal solutions and norms of business. Therefore, within the framework of this paper, the authors try to establish the level of the (non)execution of obligations in financing the joint project, (un)timely remittance of approved loan funds, (un)reasonable costs of loan and interests on loan, (im)possibility of the project realisation, (non)payment of agreed loan obligation, (non)compliance with the monitoring contract. On the contrary, it led to (non)reasonable hypothecation of real estate in the local company's portfolio which prevented further independent development of the project. Due to the large number of risky transactions made in the first decade of this century, today, the EU banks must act within the guidelines of Basel III, introduced in the year 2008