Erste Bank to move development funds from Hungary

Erste Group would not invest resources earmarked for business development in Hungary. It will, however, ensure sufficient capital for capital adequacy and liquidity to its Hungarian unit, Erste Group chairman-CEO Andreas Treichl said.

"We will not allow such an adversarial economic policy -- that causes Hungary serious harm -- to drive us out," Andreas Treichl pointed out in an interview with Napi Online. He also stressed that Erste remains a partner for its customers in Hungary, will not withdraw from the country and will protect the interest of its depositors.

Hungary's government is making banks shoulder the costs of an early repayment scheme for foreign currency-denominated loans at a discounted exchange rate.

The "hostile" economic policy measures of the Hungarian government may "turn investors away" from the country and investments in the region can be taken to the Czech Republic, Romania or Slovakia instead, he said.

Due to the above, Erste will take its development funds elsewhere, the CEOl said, adding that Erste’s Hungarian subsidiary will always receive the funding necessary for a solid capital adequacy ratio and sufficient liquidity, not that the bank would need such assistance now.

As of 1 October, Erste Bank Hungary will not accept loan agreements via brokers, and the bank's lending products will only be available directly at is branches. Treichl, however, said Erste wants to maintain its strategic ties to Magyar Posta, Vienna Insurance Group and ING Biztosító.