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Erste Bank Hungary to get Ft 14 bln capital raise

Austria's Erste Bank AG plans a Ft 14 billion capital raise at its unit in Hungary, an invitation published on Friday to an Erste Bank Hungary Zrt shareholders meeting reveals.

The EGM to convene on September 27 will vote on the raise, which will be carried out through the private issue of new shares at par. Shareholders will also vote on giving the board a mandate to further raise capital.
The capital raise will increase the bank's registered capital from Ft 39.41 billion to Ft 53.41 billion. The EGM invitation did not explain the reason behind the capital increase but it may be linked to the recent rapid expansion of the bank' retail and corporate loans. The bank's total assets rose by a sharp 45.3% in twelve months to Ft 1.649 billion at the end of June according to unaudited unconsolidated Hungarian accounting standards figures published on August 8. Net profits were practically unchanged from a year earlier at Ft 7.89 billion in H1 2006. Erste Bank had net assets of Ft 81.9 billion at the end of June.