Are you sure?

Raiffeisen business in Hungary suffers effects of bank levy but provisioning falls

The Hungarian banking business of Austria's Raiffeisen International was hit hard by an extraordinary bank levy in Q1-Q3, but provisioning was down sharply because of lower default rates and restructuring measures, the banking group's report for the period published on Monday says.

Austria's Raiffeisen International booked a €31 million cost in Q1-Q3 for an extraordinary financial sector tax its unit in Hungary must pay, the report says.

Raiffeisen International booked a €39 million loss on its "other net operating income" line in Q1-Q3, compared to profit of EUR 3m in the same period a year earlier. It attributed the loss mainly to the bank levy in Hungary.

Raiffeisen International's provisioning for impairment losses in Hungary came to €127 million in Q1-Q3, down €65 million from the same period a year earlier because of lower default rates and restructuring measures.

Net interest income in Hungary fell year-on-year because of decreased lending activity, especially in foreign exchange transactions, together with lower earnings from derivative instruments related to a lower volume of customer deposits.

Net income from commissions and fees grew in every country in the region with the exception of Hungary, Raiffeisen International said.

Raiffeisen International's unit in Hungary had total assets of €8.623 billion on September 30, 2010, down 1.8% from the last day of 2009.

"Hungary especially" is likely to lag behind in growth in Central Europe in 2010, Raiffeisen International said. (MTI-ECONEWS)