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BayernLB completes HUF 26.5 bln capital raise at Hungarian unit

BayernLB has completed injecting HUF 26.5 billion into its Hungarian unit MKB Bank in a capital raise, MKB Bank said.

MKB Bank earlier announced the capital raise which is designed to keep the bank on the earlier decided growth track, and keep its operation profitable in an environment characterized by high volatility and scarcity of financing. MKB Bank said in December it expects bigger-than-planned risk provisions to bite into 2008 profits, causing them to fall under the target.

The HUF 1,000 nominal value new shares were subscribed at HUF 39,500 in the private placement, and increased the registered capital by HUF 670.9 million to HUF 14.77 billion.

BayernLB's presence on the Hungarian market presence continues to be a key element of its strategy for the Central and Eastern European region, the bank said.

In December, BayernLB said though it is scaling back its activities, this will affect mainly Asia, not Central and Eastern Europe. BayernLB continues to see serious growth potential in the region.

Acting as the flagship for BayernLB's expansion in Eastern Europe, MKB Bank acquired two banks in 2006: Unionbank, which has a 1.5% share of the Bulgarian market, and Romexterra, which control's 0.8% of Romania's market. MKB Bank said earlier it aims to get a 4%-5% share of markets in the two countries in the mid-term. (MTI – Econews)