UniCredit Denies Reports It Would Exit Hungary

By Margit Feher

BUDAPEST--Italian lender UniCredit S.p.A. (UCG.MI) said Tuesday that it is not planning to exit Hungary, nor is it interested in buying the Hungarian arm of Austrian peer Raiffeisen International AG (RBI.VI).

"UniCredit clearly intends to stay in Hungary," the bank quoted Gianni Franco Papa, head of UniCredit's central and Eastern European Division, as saying in a statement.

UniCredit made the comments to deny recent press reports claiming that it would want to divest its Hungarian operations should the Hungarian government levy new taxes on the already heavily taxed sector.

The Hungarian central bank recently said it expects the banking sector to consolidate in the medium term, with some of the foreign banks, which dominate the ownership of the sector, leaving the country. Hungarian Prime Minister Viktor Orban has said that he would like to see half of the banking sector in Hungarian hands.

UniCredit closely monitors the Hungarian business environment "to adapt our business model in time and to secure positive results," Mr. Papa added.

UniCredit was one of the few Hungarian banks that has generated profits over the past several years while the banking sector overall has made losses due to the economic downturn as well as to the government's numerous bank-sector taxes.

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