Economy
UniCredit has no plan to withdraw from Hungary - Papa
(Updates with comment by UniCredit)
UniCredit will have to reconsider its business in Hungary if Budapest imposes another round of taxes on the financial sector, head of the Italian bank's Central and Eastern Europe division. Gianni Franco Papa also told reporters in Vienna that UniCredit will not walk away from Ukraine because of political unrest, particularly as its business there has been doing better than rivals. Later in the day the bank issued a statement, stating that it has no intention to pull out from Hungary.
UniCredit wants to stay - 15:50
"UniCredit clearly intends to stay in Hungary. Its local bank is still one of a very few profitable banks there. Nevertheless we are closely monitoring the local business environment in order to adapt our business model in time and to secure positive results. We are not interested in bidding for the local subsidiary of Raiffeisen," the bank said in a statement, citing Gianni Franco Papa, Head of UniCredit CEE Division.
UniCredit to reconsider Hungarian business if new tax is imposed - 12:27
Papa told reporters in Vienna that CEE's leading lender would have to reconsider its business in Hungary if Budapest imposes another round of taxes on banks, and that he was not worried about stress testing of its bank in Slovenia, Reuters reported on Tuesday.
Papa said UniCredit was making money in Hungary but that the financial burden the government was imposing on banks and other segments of the economy was getting close to unbearable.
While tax alone was no reason to exit a country, "hopefully they are not going to impose other taxes because this would really break the camel's back," he said.
"We cannot keep on going like this. If they start again with a new round we will reconsider."
Banks in Hungary lost more than 1 billion euros under a 2011 government relief scheme for households with foreign currency mortgages. Its constitutional court is looking into whether such loan contracts are unconstitutional.
Any new government measure would affect Hungary's biggest lender, OTP Bank, as well as local units of Austria's Raiffeisen and Erste, Italy's Intesa Sanpaolo, Belgium's KBC and others.
Raiffeisen Bank International said in mid-November that it cannot exclude that it will pull out from Hungary and Slovenia.
"In addition to the Ukraine, markets such as Hungary and Slovenia are currently under special review and a withdrawal from these markets cannot be excluded," Reuters cited RBI as saying in a statement on 18 Nov.
A day later an RBI spokeswoman confirmed a report by the Austria Press Agency that quoted her as saying: "There are interested parties in Hungary whose offers we are reviewing".Ukraine plunged into crisis after President Viktor Yanukovich dropped a trade deal with the European Union under pressure from Russia, triggering mass protests.
UniCredit has just finished merging its two banks in Ukraine, which combined have around EUR 3.3 b in assets, 435 branches and 6,200 staff in a country that Papa called "an important part of Europe".
"I think we have been weathering the situation in the country much better than many other competitors in the country," he said, having already restructured operations heavily to cut costs and address risks.
"An investment like this cannot be just left out because of (one) situation or another. What is important for us as a bank is to have stable countries... because turmoil is never good for business," Reuters cited Papa as saying late on Monday.
"I don't really think that what we are seeing in Ukraine is very much different from what we have seen in the last six or seven years."
But he said the situation could not be allowed to go on for weeks as the country decides its direction.
UniCredit Chief Executive Federico Ghizzoni had said in October that the bank was sounding investors out on the possibility of selling its Ukrainian unit.
"We are still there, which means that either nothing pops up or what pops up was not interesting," Papa said, but he would not say UniCredit had ended its deliberations. "For the time being we are there," he said. "I don't have a crystal ball."
UniCredit will have to reconsider its business in Hungary if Budapest imposes another round of taxes on the financial sector, head of the Italian bank's Central and Eastern Europe division. Gianni Franco Papa also told reporters in Vienna that UniCredit will not walk away from Ukraine because of political unrest, particularly as its business there has been doing better than rivals. Later in the day the bank issued a statement, stating that it has no intention to pull out from Hungary.
UniCredit wants to stay - 15:50
"UniCredit clearly intends to stay in Hungary. Its local bank is still one of a very few profitable banks there. Nevertheless we are closely monitoring the local business environment in order to adapt our business model in time and to secure positive results. We are not interested in bidding for the local subsidiary of Raiffeisen," the bank said in a statement, citing Gianni Franco Papa, Head of UniCredit CEE Division.
UniCredit to reconsider Hungarian business if new tax is imposed - 12:27
Papa told reporters in Vienna that CEE's leading lender would have to reconsider its business in Hungary if Budapest imposes another round of taxes on banks, and that he was not worried about stress testing of its bank in Slovenia, Reuters reported on Tuesday.
Papa said UniCredit was making money in Hungary but that the financial burden the government was imposing on banks and other segments of the economy was getting close to unbearable.
While tax alone was no reason to exit a country, "hopefully they are not going to impose other taxes because this would really break the camel's back," he said.
"We cannot keep on going like this. If they start again with a new round we will reconsider."
Banks in Hungary lost more than 1 billion euros under a 2011 government relief scheme for households with foreign currency mortgages. Its constitutional court is looking into whether such loan contracts are unconstitutional.
Any new government measure would affect Hungary's biggest lender, OTP Bank, as well as local units of Austria's Raiffeisen and Erste, Italy's Intesa Sanpaolo, Belgium's KBC and others.
Raiffeisen Bank International said in mid-November that it cannot exclude that it will pull out from Hungary and Slovenia.
"In addition to the Ukraine, markets such as Hungary and Slovenia are currently under special review and a withdrawal from these markets cannot be excluded," Reuters cited RBI as saying in a statement on 18 Nov.
A day later an RBI spokeswoman confirmed a report by the Austria Press Agency that quoted her as saying: "There are interested parties in Hungary whose offers we are reviewing".Ukraine plunged into crisis after President Viktor Yanukovich dropped a trade deal with the European Union under pressure from Russia, triggering mass protests.
UniCredit has just finished merging its two banks in Ukraine, which combined have around EUR 3.3 b in assets, 435 branches and 6,200 staff in a country that Papa called "an important part of Europe".
"I think we have been weathering the situation in the country much better than many other competitors in the country," he said, having already restructured operations heavily to cut costs and address risks.
"An investment like this cannot be just left out because of (one) situation or another. What is important for us as a bank is to have stable countries... because turmoil is never good for business," Reuters cited Papa as saying late on Monday.
"I don't really think that what we are seeing in Ukraine is very much different from what we have seen in the last six or seven years."
But he said the situation could not be allowed to go on for weeks as the country decides its direction.
UniCredit Chief Executive Federico Ghizzoni had said in October that the bank was sounding investors out on the possibility of selling its Ukrainian unit.
"We are still there, which means that either nothing pops up or what pops up was not interesting," Papa said, but he would not say UniCredit had ended its deliberations. "For the time being we are there," he said. "I don't have a crystal ball."
