Bank levies and transaction duties accounted for €72 million in expenses and “Hungary’s spluttering economic recovery and … subdued climate for consumption and capital expenditure” also hurt.
Despite the poor results in Hungary, however, Bayern LB was able to report an overall 370% increase in profit before taxes year-on-year from €120 million to €563 million, thanks in large part to the €351 million sale of its GBW real estate business in April.
As part of a €5 billion bailout deal with the German government and the European Commission, Bayern LB must sell its stake in MKB Bank by the end of 2015.
“Developments in Hungary are of key importance for BayernLB,” read a statement from the bank. “The country’s government is toying with the idea of fresh political intervention on foreign currency loans which could severely test the business of banks operating there.”
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