UniCredit to cut costs in Hungary

Banking

The Hungarian unit of Italy-based UniCredit will close some branches to reduce costs after the government imposed a tax on financial transactions earlier this year, UniCredit CEO Mihály Patai said yesterday.

Patai was quoted at hvg.hu as explaining that the bank will need to pay HUF 6.8 billion ($30.49 million) in additional tax imposed on transactions, which it cannot pass onto customers.

Hungary’s banks, most of which are foreign-owned, have suffered losses in the past two years after the government imposed a big windfall tax on the sector in 2010 and a new tax on financial transactions this year.

An earlier government-imposed repayment scheme on foreign currency mortgages also inflicted losses on banks.

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