BUDAPEST, July 26 Banks in Hungary are at a
critical stage and cannot suffer any new losses as the
government tries to rid masses of Hungarians from foreign
currency loans, Raiffesen's chief in Hungary, Heinz
Wiedner told Reuters in an interview on Friday.
Following are highlights from an interview.
"I cannot exclude anything, but at least the recent
statements that were made yesterday and today and in our meeting
with Mr (Economy Minister Mihaly) Varga, at least indicate that
we (are) looking for some solutions right now.
"There is no room on the banks' balance sheets any more
after all these additional burdens that we are already taking.
"Just look at the banks' profitability in the sector, I mean
clearly overall it is negative and they already faced an
additional charge which was quite significant because the
government was kind of miscalculating... what they would get
from the transaction tax...
"Like the state, also the banks actually are at a critical
stage and we are not able to suffer additional losses.
"So whatever solution we come up with has to be a solution
which won't affect in any significant way neither the state
budget nor the banks' profitability.
"But also there is not a one-off, one single ideal solution
because if it was so simple then we would have found it already.
"This should be the discussion among both parties in the
next months to see whether we can come up with something that is
a situation that is both bearable for the government and for the
banks, and in the end for the customers.
"I hope this one (relief package) is the last one. This
definitely should be the last attempt.
"There is a relation whether we like it or not depending on
the burden that is brought on the banks again. An additional
burden that will cause a loss to the banking sector signifies
that banks have less capital available. You can either bring in
capital from the owners or reduce lending capacity.
"If I look at the history since I am here in this country
unfortunately I have to say there is still a doubt obviously
that whatever we discuss and agree will actually hold.
"In the end it will probably be a political decision, but
let's hope that this time they mean it but obviously I cannot be
sure about it."
(Reporting by Sandor Peto and Gergely Szakacs)