Germany’s BayernLB will inject HUF 26.5 billion ($114 million) into its Hungarian banking unit MKB to provide it with additional liquidity, the subsidiary said in a statement on Monday.
In the process MKB’s registered nominal capital will be raised by HUF 671 million to HUF 14.765 billion. The capital increase will help the bank stay on a growth path, it said.
“BayernLB, as (a) presence in the Hungarian financial market remains a key part of its strategy, is ready to support the Hungarian financial system by providing liquidity to help restore investor confidence in the (Hungarian) economy which is also an indispensable condition of stabilization in Europe,” it added.
The global credit crunch has reduced the liquidity of Central European banks, especially those which have relied on sources from abroad to finance a rapid expansion of lending in recent years.
Austria, whose banks are heavily exposed to central and eastern Europe, launched an initiative last week for an aid package to stabilize the region’s banking sector. Raiffeisen Zentralbank, owner of Raiffeisen International, will get a state capital injection of €1.75 billion ($2.25 billion) to help it weather the credit crisis. (Reuters)