Hungary's MKB bank, controlled by Germany’s Bayerische Landesbank, plans to sell its Romanian unit, MKB Romexterra in 2013, the bank’s consolidated 2010 annual report (IFRS) shows.
“Based on its exit strategy MKB intends to sell its share in MKB Romexterra Bank in 2013,” MKB said in its 2010 annual report published on 15 April, Portfolio.hu wrote. The highest estimated proceeds from the sale are HUF 2.395 billion, it added. This has been taken into consideration at the cash flow projected for end-2013, the bank said.
MKB, which had taken over Romexterra in 2006, upped its stake in the bank to 90.79% from 82.47% in 2010.
“According to the business plan, the bank is expected to incur a HUF 2.336 bn pre-tax loss in 2011 and HUF 1.381 bn loss in 2012,” MKB said. The bank's after-tax loss amounted to HUF 42 bn in 2010.
MKB’s management expect the restructuring at the Romanian unit to lead to an increase in both Romexterra’s net interest income and non-interest income.
“We expect unfavorable economic conditions in Romania in 2011, which will continue to greatly affect the banking and leasing activities, and we also project major impairment at group level.”
MKB also said the restructuring would involve selling part of the non-performing loans.