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MKB posts pre-tax losses of HUF 109 bln for 2011

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MKB Bank had pre-tax losses of HUF 109.5 billion in 2011, according to the bank's audited consolidated IFRS report, due to continuing external and internal macroeconomic difficulties and government measures causing major losses, the bank said at the weekend.

MKB's parent bank, Germany's BayernLB, had already said in its report for the period published Thursday that its Hungarian unit had a loss of €392 million in 2011.

MKB Bank losses fell slightly from HUF 117.8 bilion in the previous year.

MKB attributed the losses to write-offs related to subsidiaries and higher-than-average real estate project portfolio. The bank levy and the early FX repayment scheme combined directly caused losses of close to HUF 40 billion for the Hungarian bank group.

MKB group's gross profit declined 15% from a year earlier. Excluding one-off write-offs and restructuring costs, the group's operating costs remained stable.

Excluding adverse impacts (risk provisions related to the subsidiaries and to the real estate project portfolio, losses related to early repayment and bank levy, one-off write-offs), the bank had pre-tax profit of close to HUF 10 billion, MKB said.

MKB also noted that the self-financing capability of the bank as well as the group improved further. The group's LPTF (loan-to-primary funds) ratio fell to 137% from 148% a year earlier, and the bank is self-financing in the strategic core segments with an LTPF ratio of 79%.

MKB had consolidated total assets of HUF 2,944.0 billion at the end of 2011, down 0.2% from a year earlier. The consolidated stock of loans declined 8.4% to HUF 1,994.6 billion and the stock of deposits was down 0.3% at HUF 1,463.5 billion.

BayernLB carried out a €200 million capital raise in January this year through private placement. The statement said the parent bank had to raise capital due to losses related to the early forex repayment scheme.

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