Erste Bank reports weak 2013, Hungary “ordeal” cited


Topping international banking-related headlines yesterday were stories based on reportage of Austria-based Erste Group Bank’s 2013 earnings – and some damage control from bank executives with regard to the financial institution’s interests in Hungary.

Erste Group posted what some analysts described as a “meager” net profit of €301.2 million in the first six months of this year, while miscellaneous operating costs jumped to a whopping €397.7 million in the period, a big jump from the €68.1 million reported last year. These latter figures were attributed in part to “negative one-off effects” including advance banking-tax payment to Hungary and banking/financial transaction taxes in Hungary. Actions and payment in Austria, Slovakia and Ukraine also helped make up the minuses.

Speaking at a press conference in Vienna after presentation of the results, Erste Group CEO Andreas Treichl admitted that his bank has yet to turn a profit on its Hungarian operations since opening for business in the country in 1997 but remained hopeful that the “Hungarian bank ordeal” would soon be over.

“There could be a bit of a reduction of our pain in Hungary,” Treichl opined to reporters. “There seems to be more awareness now that the government actually needs the banks to fuel economic growth, and I’m absolutely convinced that the Hungarian government wants to see economic growth,” going on to state that he believed the Orbán administration is “willing to discuss [the forex-based mortgage loan] issue with the banks and to find a common solution.”

Treichl tempered his enthusiasm with realistics, however, saying that “I don't believe we will have a positive result in Hungary next year. If it happens, I would be surprised and happy but currently that's not in our planning.”

Erste Bank Hungary is the second-largest lender in the country, behind only OTP Bank.


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