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Total assets of RBI business in Hungary fall 14% in 2011

MNB

Total assets of Raiffeisen Bank International's (RBI) business in Hungary fell 14.2% to €7.32 billion at the end of 2011 from a year earlier, the bank's report for the period published on Thursday shows.

RBI said its focus in Hungary is on international corporate customers with good credit ratings and domestic SMEs. It added that the emphasis in the SME segment is "increasingly on advisory and transaction-driven services such as cash management solutions".

RBI said it is streamlining its sales network in the retail segment. It added that lending is "defensively oriented" while the main focus for wealthier retail clients is on deposits.

RBI CEO Herbert Stepic said Hungary is "without a doubt the most difficult market for us at the moment" in the bank's report.

"We are...subject to the government's arbitrariness, as seen for example in the excessive bank levy or in the possibility of repaying foreign currency mortgage loans at fixed exchange rates. This forced us to increase provisioning, leading to a significant loss in Hungary," he said.

"Despite all this, however, we must not lose sight of the fact that we made a very good profit in Hungary for many years, which enabled us to offset less favorable trends in other markets," he added.

Under a government initiative that ran from the end of September until the end of February, Hungarian borrowers with foreign currency-denominated mortgages could make full repayment at discounted exchange rates. Banks were left to cover the difference between market rates.

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