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BUDAPEST, March 28 The lossmaking Hungarian unit
of Austrian lender Raiffeisen Bank International is
unlikely to return to profit before 2016, although government
policies beyond the elections next month are tough to predict,
the unit's chief executive said on Friday.
"We see profit returning from 2016 at this point although it
could happen earlier," the chief of Raiffeisen's Hungarian
operation, Heinz Wiedner, told a news conference.
"Government policies are not easy to predict more than one
year into the future."
Hungary's ruling centre-right Fidesz party, set to win a new
four-year term in elections on April 6, has used heavy taxes and
other measures in the banking sector to cut debt and bring its
budget deficit lower to meet European Union rules.
The process, coupled with a deep recession that hit Hungary
in the economic crisis after 2008, meant that many banks,
including Raiffeisen, have plunged deep into the red.
"We don't calculate on a profit this year in Hungary,"
Wiedner said, reiterating comments from its parent on Thursday.
"There will be no substantial improvement in results from last
He said that government plans to unwind the country's huge
stock of foreign currency-denominated housing loans will be
crucial to seeing how quickly the bank can return to making
Prime Minister Viktor Orban has said that he plans to do
away with all foreign currency loans after a top court ruling
allowed the government to modify the terms of the loans
Therefore, on balance Raiffeisen expects no favourable
change in government policy after the elections, Wiedner said.
The leftist opposition alliance that is the main challenger
to Fidesz also plans to maintain what is one of Europe's
toughest tax regimes for banks in the near term, the
opposition's leader has told Reuters.
Raiffeisen's shares were up 3.2 percent on the Vienna bourse
at 1351 GMT compared with a 0.8 percent rise in the wider market
. The bank reported better than expected results on
Thursday and renewed its commitment to Russia.
(Reporting by Marton Dunai; Editing by Greg Mahlich)