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Erste posts Q1 losses of €31.8 mln in Hungary

Erste Group's banking operations in Hungary had a net loss of €31.8 million in Q1 as risk provisions grew and an extraordinary bank levy ate up earnings, Erste Group said on Thursday.

Erste Group's operations in Hungary had net profit of €6.9m in Q1 2010.

Risk provisions in Hungary rose 38.8% to €77.3 million in Q1 from the same period a year earlier, reflecting the impact of the economic downturn on the SME and real estate businesses, the bank said.

The bank levy cost the bank's operations in Hungary €13.5 million in Q1.

Net interest income of the Hungarian retail and SME business rose 4.6% to €93.0 million, driven by exchange rate developments and wider deposit margins.