Act Legal Partner Roman Hager discusses Banking and Finance in Austria in the year past and the one ahead.
CEELM: Over the past year, which areas of banking and finance work have been generating the most activity for lawyers in Austria?
Hager: The most significant activity has come from restructurings and refinancings, with a particularly strong concentration in the real estate sector. Rising interest rates, tighter liquidity, and downward pressure on valuations have put many real estate financings under stress, especially those originated during the low-interest period between 2018 and 2022.
We are seeing a high volume of amend-and-extend transactions, maturity wall solutions, covenant resets, security top-ups, and shareholder support structures. These are rarely pure finance matters; they typically require an integrated approach combining banking, corporate, restructuring, and sometimes insolvency expertise. For lenders, the focus has clearly shifted from growth to value preservation and downside protection.
At the same time, distress is increasingly being viewed as an opportunity. Well-capitalized investors, sponsors, and alternative lenders are selectively stepping into stressed situations – refinancing existing debt, acquiring loan positions, or providing structured capital. This has created a dynamic market environment for lawyers who can bridge the gap between credit risk understanding and transactional execution.
CEELM: Are you seeing any shifts in the balance between traditional bank lending and non-bank or alternative financing, and how is that affecting the market?
Hager: Absolutely. While Austrian banks remain the cornerstone of the market, regulatory and supervisory constraints have significantly reduced their flexibility in stressed or higher-risk situations – most visibly in commercial real estate.
As a result, non-bank lenders, private debt funds, family offices, and special situation investors have gained substantial ground. They are providing financing through mezzanine instruments, bridge loans, preferred equity, and hybrid structures that banks are often unable – or unwilling – to extend under current supervisory expectations.
This trend has increased structural complexity. Financing solutions have become more bespoke, intercreditor arrangements more central, and documentation negotiations more intensive. From a legal standpoint, the challenge lies in balancing commercial creativity with the boundaries set by financial regulation – particularly where innovative structures may verge into regulated banking or securities activity.
CEELM: Have any recent regulatory or supervisory developments started to affect banks or financial institutions in practice, and how are they adapting?
Hager: Supervisory expectations have become a decisive factor in day-to-day banking operations. Austrian banks – particularly those under direct European supervision – are subject to heightened scrutiny regarding credit risk management, collateral valuation, and sector exposure, with real estate being a top focus.
In practice, this translates into stricter internal approval processes, lower loan-to-value assumptions, earlier classification of exposures as watchlist or non-performing, and greater demands to present credible restructuring or exit strategies. ESG compliance and the long-term sustainability of underlying assets are also becoming key considerations in credit decisions.
Banks are adapting by standardizing risk processes, front-loading legal and analytical review, and favoring consensual restructuring approaches over enforcement. Cooperation with sponsors, shareholders, and alternative capital providers has become an essential tool for stabilizing exposures while staying within supervisory parameters.
CEELM: Looking ahead, where do you expect activity to pick up in the market, and why?
Hager: We expect continued high activity in real estate restructurings, driven by upcoming refinancing needs, persistent valuation gaps, and regulatory pressure on banks to actively manage legacy portfolios. Many of these cases will not be resolved through traditional refinancing alone but will require holistic capital restructurings, debt-for-equity elements, or new capital injections from alternative sources.
At the same time, this challenging environment creates clear opportunities. Investors and lenders with available capital and risk appetite are actively seeking mispriced assets, stressed loan portfolios, and complex financing situations where legal structuring can unlock real value.
While new lending will remain selective, activity is likely to increase in resilient and transition-focused sectors – particularly energy, infrastructure, and sustainable real estate. Overall, we are moving from standardized growth financing to tailor-made, opportunity-driven solutions – and that is precisely where experienced banking and restructuring lawyers can make the greatest impact.
This article was originally published in Issue 13.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
