Raiffeisen CEO: “We want to stay in Hungary”
Despite certain rigid measures against the banking industry in Hungary – at a cost to Austria-based Raiffeisen Bank International (RBI) of €700 million in losses over 12 months in 2012-13 – RBI CEO Karl Sevelda promised last weekend that RBI would be keeping a presence in the country.
After taking over chairmanship of RBI in June, Sevelda delivered the bank’s six-month earnings report to investors in August. At that time, Sevelda was forced to announce an overall 60.2% decrease in earnings year-on-year; the CEO himself blamed RBI’s woes primarily to “catastrophic results in Hungary.”
Along with the August announcement, Sevelda stated that RBI would be scaling back operations in Hungary and a couple other countries in the region.
In an interview with Emerging Markets on Saturday, however, Sevelda’s outlook appeared slightly less grim. Explaining that Hungary is “our neighbouring country, it’s a partner in Austrian trade, there are a lot of Austrian investors in Hungary, and there’s a lot of emotion for Hungary in Austria. It was the first country where Raiffeisen went,” Sevelda assured that “I’m not excluding any possibilities, but for the time being we want to stay,” he said. “But we are uncertain about the government’s plans.”
The new line on RBI’s strategy for Hungary is quite a bit more optimistic than that of former RBI CEO Herbert Stepic, who had previously stated that “RBI would be better off exiting Hungary if only it could find a buyer.”
Sevelda’s stance also stands in the face of serious challenges: “The government has surprised us in the past several times with new taxes and artificial exchange rates and things like that. They all have one thing in common, which is that they cost a lot of money.”
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