Bloomberg News

Raiffeisen Hungarian Unit ‘Under Review’ on FX Loan Measures

November 24, 2011

Nov. 24 (Bloomberg) -- Raiffeisen Bank International AG, eastern Europe’s third-biggest lender, said its Hungarian unit was “under review” after policy measures undermined investor confidence in the country.

The “future strategic positioning and set-up” of Raiffeisen Bank Hungary is “under review at the moment,” the Vienna-based company said in a presentation today. “Recently announced policy measures have weakened foreign investors’ confidence in the political system.”

Hungary’s government is forcing banks to swallow losses on Swiss franc-denominated mortgages to ease the burden on borrowers. Based on a 30 percent take-up rate, “the estimated total provisioning need” for Raiffeisen on the measure is 100 million euros ($134 million), it said.

Raiffeisen sees a 2011 loss after tax of 320 million euros in Hungary and a “substantial recapitalization consequently” is planned in the fourth quarter, according to the presentation.

The lender also is cutting its work force by 11 percent, after a 19 percent reduction in 2009, and is closing 10 branches, following a shut-down of 19 in 2009, the bank said.

To contact the editor responsible for this story: Zoe Schneeweiss at

Tim Cook's Reboot
blog comments powered by Disqus