One of Europe’s Biggest Banks Collapses

One of Europe’s Biggest Banks Collapses

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BRUSSELS (Worthy News)– One of Europe’s largest banks, Austria’s largest bank by assets, will post a $2.2 billion loss this year.

Erste Group Bank AG (EBS), the Austrian bank earning most of its income in eastern Europe, plunged as a bad-debt clean-up forced by Romanian regulators and fee refunds in Hungary will cause a record loss this year.

Erste, which owns the second-largest Hungarian and the biggest Romanian bank, will post as much as a 1.6 billion-euro ($2.2 billion) loss this year as bad-loan provisions will rise 40 percent more than forecast earlier and trigger additional writedowns, it said in a statement yesterday. The shares fell 16 percent to 19.52 euros in Vienna as of 3:37 p.m., the lowest level in almost a year.

“This is a clearly bad surprise as it comes in addition to the already ‘badly surprising’ warning issued by the group at the beginning of this year,” Natixis Securities SAS analyst Steven Gould said in a note to clients. “These announcements hurt the management’s credibility going forward.” — Source

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