Hungarian banking situation “sensitive issue” in Austria

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The situation of Hungarian banks is a sensitive issue in Austria, Ewald Nowotny, the governor of the country’s central bank, said in an interview in business daily Napi Gazdaság today. Speaking about a possible withdrawal of Austrian banks from Hungary, Nowotny said it was in the interest of both sides to avoid making hasty decisions and to think with a long-term perspective. 

He noted that Hungarian banks had recently been forced to write down big losses, however. Considering how long they are prepared to operate on a market in which profit is not being generated is an absolutely rational question of doing business, he added.

“I hope that there is no pressure on Austrian banks to massively scale back their Hungarian units,” Nowotny said. “In any case, they have to consider which banking activities are worth undertaking on the Hungarian market in the long term…

“Naturally, Hungary is not indifferent to how certain situations turn out, because they can also have a negative effect on the Hungarian economy,” he added.

Austria’s Raiffeisen Bank International recently considered, but rejected, an offer for its Hungary-based business.

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