Erste Group books €566.6 mln loss at business in Hungary

Food

Erste Group booked a €566.6 million net loss at its business in Hungary last year, the Austrian banking group said in its report for the period published on Wednesday.

Last year, the group had a €21.8 million loss at the business. The group carried out a capital increase of €600.0 million at the Hungarian business in November 2011. Erste Group set aside €567.7 million in risk provisions at the business last year. The provisions included €200.0 million to cover expected losses from a scheme allowing early repayment of fx-denominated mortgages at discounted exchange rates.

The group wrote off further goodwill of €312.7 million in Q3 2011 "in view of the current development of earnings and forecasts for the Hungarian economy".

Net interest income in the Hungarian retail and SME segment improved by 4.0% to €402.7 million in 2011. The bank's cost-to-income ratio improved to 38.6% in 2011 from 39.9% in 2010. The group forecast a "mild negative performance" for Hungary in 2012.

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