Raiffeisen says pullout from some markets possible, but not from Hungary
It is conceivable that Raiffeisen Bank could pull out from one or two countries in the region, but it sees no reason to leave Hungary, CEO of the Austrian banking group Herber Stepic said at a press conference in Vienna on Thursday.
"It’s very conceivable that we could pull out of one market or another," Mr Stepic said.
Any such pullout would be from a market generating little revenue and where the long-term outlook for development is weak, he said. Hungary is not among these markets for the time being, he added.
Raiffeisen Bank booked a €286m loss in Hungary in Q1-Q3 and "significant recapitalisation" will be necessary in the country in Q4, Mr Stepic said. Losses in Hungary are expected to reach €320m for the full year, and at least this amount must be recapitalised, he added.
Losses in Hungary are in large part due to €373m in provisioning and €33m for the bank levy.
Operating in the macroeconomic and political environment in Hungary presents "a big challenge", the bank said.
Raiffeisen Bank’s Hungarian unit is undergoing a restructuring that includes a selective reduction of the portfolio.
Mr Stepic said few of the unit’s clients had availed of a government scheme allowing early repayment, in full, of foreign currency-denominate mortgages at discounted exchange rates. The unit’s stock of retail Swiss franc-denominated loans, once the most popular lending product in Hungary, was €1.4bn at the end of September, around the time the scheme was launched. By mid-November, borrowers accounting for 8.2% of these assets had joined the scheme and borrowers with 6.3% of the loans had already completed repayment.
Raiffeisen Bank expects about 30% of its clients to avail of the scheme, reducing 2012 profit by €17m.
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