Resumen
Drawing on interviews with the heads of the workout units of a non-probability sample of 12 Austrian banks, this exploratory study investigates the relationship between distressed borrowers and their banks. The heterogeneous sample was selected based on several structural factors with one main criterion being the regional or international focus of the respective bank. The findings suggest that internal loan workouts are the predominant and preferred strategy amongst most interviewed banks. However, while the international banks do not restructure at all costs, working out the distressed nature of the loan appears to be the overarching objective of regional and smaller banks. By implication, the regional banks were found to be more ?hands-on? when dealing with distressed loans than their larger international counterparts. Active loan workout processes and specialised units were also found to be part of both international and regional banks? strategies to deal with distressed loans. The regional banks were also more inclined to include the relationship banker in the workout process and tend to take longer to workout distressed loans.