EBRD, Hungary expected to buy into Erste
The European Bank for Reconstruction and Development (EBRD) and the Hungarian state will be buying into Erste Bank Hungary, with each increasing the capital of the bank by 15%, the Prime Minister, the EBRD president and the CEO of Erste Bank are expected to announce at 4pm, according to reports.
Portfolio.hu speculates that the deal was made during negotiations initiated by the bank, in which Erste sought a reduction of Hungary's bank tax. Part of the deal may also be an agreement by Erste, which lost money on its local loan portfolio due to Hungary's new borrower's relief law, to agree to increasing its loan activity.
Meanwhile, there was also anticipation of a major announcement from Raiffeisen Bank, after market closing today. On February 3, Erste Hungary denied reports that it was involved in talks about buying into Raiffeisen's Hungarian operation.
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