Austria's Raiffeisen Bank International halts sale of loss-making Hungarian subsidiary

By VCPOST Staff Reporter

Jan 09, 2014 01:07 AM EST

Viena-based lender Raiffeisen Bank International AG has decided not to sell its Hungarian unit for now, two sources told Reuters on Wednesday. RBI's decision came after media reports said that such a deal could be imminent.

According to the report, RBI said in November that it was reviewing offers for the loss-making Hungarian business as it focuses on more promising markets in the region. RBI is the second-biggest bank in central and eastern Europe.

Several media outfits had reported that Hungary's partly state-owned Szechenyi Bank was in talks to buy RBI's Hungarian unit. Hungary holds a 49% stake in Szechenyi Bank, Reuters said.

But the two sources said that RBI had decided against doing a deal on the grounds that selling at a knock-down price would trigger losses the bank was not prepared to accept, the report stated.

RBI's Hungarian unit has lost  €81 million ($110 million) in the first nine months of 2013. It had €6.2 billion in assets under management at the end of September and a €5.3 billion loan book. RBI's Hungarian subsidiary operates from 124 outlets and has 2,715 staff, Reuters said.        

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