BayernLB scraps plans to split Hungary bank unit
FRANKFURT Dec 12 (Reuters) - German state-backed lender BayernLB has scrapped plans to break up its troubled Hungarian unit MKB, a move it had hoped would improve the chances of a sale, it said on Thursday.
BayernLB had said in November it was looking at possibly bundling MKB's retail and corporate banking activity into one business, while setting up a separate unit to house long-term loans that have high refinancing needs.
MKB's executives decided that splitting the bank's activities would be more expensive than gradually trimming its assets and communicated that conclusion in a regulatory disclosure to the Hungarian stock exchange, BayernLB said.
The European Commission ordered BayernLB last year to restructure and sell some businesses as a precondition for approving state aid for the German regional lender. BayernLB ran into trouble in 2008 after risky investments turned sour. (Reporting by Andreas Kroener; writing by Jonathan Gould. Editing by Jane Merriman)
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