Hypo Alpe-Adria lost $370M in 14 days of FX trading — then collapsed five years later

Hypo Alpe-Adria-Bank International was an Austrian bank majority-owned by the state of Carinthia, with operations across the Balkans. It was one of Austria's most politically connected banks, closely tied to Governor Jörg Haider.

In 2004, the bank suffered approximately EUR 328 million ($370 million) in losses from speculative foreign exchange trading within a span of 14 days. The bank was trading currencies including the dollar, Swiss franc, yen, and euro. The losses were so severe that the bank's 2004 balance sheet was restated, showing a loss from ordinary activities of EUR 99 million, with additional write-offs in 2005.

The Austrian government launched an investigation. CEO Wolfgang Kulterer confirmed the losses, and Governor Jörg Haider called for a thorough probe. BayernLB, the Bavarian state-owned bank, bought a controlling stake in 2007 — a decision that would later cost BayernLB billions.

The 2004 forex loss was a harbinger. In 2009, Hypo Alpe-Adria was nationalized after massive bad loans from its Balkan operations (€13-19 billion in unpaid loans). The bank was dismantled in 2014, with remaining assets placed in a bad bank. The broader scandal involved 160 instances of suspected fraud totaling €1.6 billion.