VIENNA, July 11 (Reuters) - Austria’s Raiffeisen banking group is set to remain profitable this year unless more big hits from Hungary emerge, senior executive Walter Rothensteiner told a magazine.
Rothensteiner is chief executive of unlisted Raiffeisen Zentralbank and chairman of its central and eastern Europe arm, Raiffeisen Bank International.
Asked by Format magazine whether the CEE region was turning from a blessing to a curse, as evidenced by rival Erste Group Bank’s warning last week that hits from Hungary and Romania would drive it to a record 2014 loss, he said:
“Our house did not have a single year of losses in this time (since the financial crisis erupted). That will presumably also be the case this year if politics in Hungary become reasonable again. We are not doing roaring trade, but are still making good money.”
A new Hungarian law that makes banks compensate customers for loans deemed to be mispriced, will cost Austrian lenders hundreds of millions of euros this year. RBI said this week the law could cost it up to 160 million euros ($218 million).
More hits could arise later this year should the government in Budapest follow through on plans to make banks convert foreign-currency loans into forint loans.
Analysts expect RBI, which makes up the bulk of RZB’s business, to boost net income to around 516 million euros this year from 357 million in 2013, according to Thomson Reuters data.
$1 = 0.7331 Euros Reporting by Michael Shields; Editing by Elaine Hardcastle