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Erste, Raiffeisen keep outlook after OTP warning
August 12, 2014 / 9:42 AM / 3 years ago

Erste, Raiffeisen keep outlook after OTP warning

VIENNA, Aug 12 (Reuters) - Austrian lenders Erste Group and Raiffeisen Bank International (RBI) maintained their guidance on Tuesday after Hungary’s OTP bank issued a profit warning on the grounds that mandatory refunds to borrowers could be higher than expected.

“RBI confirms the guidance previously communicated of an expected one-off charge of between 120 million and 160 million euros ($160-213 million) for 2014 resulting from legislation relating to foreign currency loans and unilateral rate changes in Hungary,” RBI said in response to an enquiry.

“At this point in time, it is anticipated that the charge will come in towards the upper end of the range.”

“Erste Bank guidance remains unchanged,” that lender said when asked about OTP’s comments.

UniCredit Bank Austria said it had nothing to add to its comments last week on Hungary.

“UniCredit Bank Hungary is less affected than local competitors by Orban government measures due to a smaller retail FX loan portfolio (around 460 million euros).”

“Nevertheless, our subsidiary bank built up roughly 30 million euros in provisions (and it is expected to close the year with a profit),” the bank said in an email.

Bank Austria said all Hungarian banks were awaiting guidance from the central bank on how to implement the rebates, guidance that OTP had cited in its comments.

1 US dollar = 0.7495 euro Reporting by Georgina Prodhan

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