|
 Raiffeisen, central and eastern Europe's second-biggest lender, had
said in November it was reviewing offers for the loss-making
Hungarian business as it focuses on more promising markets in the
region.
Hungarian media had reported that tiny Hungarian lender Szechenyi
Bank, in which the state holds a 49 percent stake, was in talks to
buy the Hungarian unit, which lost 81 million euros ($110 million)
in the first nine months of 2013.
But the two sources said Raiffeisen 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 deal is off," one of the sources said.
Raiffeisen declined to comment on the matter.
Hungary's mostly foreign-owned banking sector enjoyed hefty profits
before the 2008 financial crisis but loan defaults, windfall taxes
and a 2011 government measure to help foreign-currency loan holders
have caused big losses in recent years.
Prime Minister Viktor Orban, who faces elections in 2014, has often
said that more than half the banking sector should be in Hungarian
ownership. He is considering further steps to help foreign-currency
borrowers.
Hungary's economy minister had said on Tuesday that a sale of the
Raiffeisen unit could not be taken for granted.
Hungarian National Bank spokesman Istvan Binder said the central
bank, which is also the country's financial regulator, had not
received any application for licenses linked to a deal.
"The National Bank of Hungary is not aware of applications for
licenses to acquire a controlling stake or for asset transfers
related to the affected commercial banks," he said in an emailed
response to a query. "For both steps, or forms of sale, the license of the National Bank
of Hungary would be needed."
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Raiffeisen Bank International shares ended up 2.5 percent at 27.535
euros, while the Stoxx European bank sector index <.SX7P> rose 1.1
percent.
Raiffeisen's Hungarian unit had 6.3 billion euros in assets at the
end of September, a 5.2 billion euro loan book, 124 outlets and
2,715 staff.
The Austrian bank has also not ruled out an exit from Ukraine or
Slovenia, markets that it has under special review.
($1 = 0.7349 euros)
(Reporting by Michael Shields and
Georgina Prodhan in Vienna, Arno Schuetze in Frankfurt and Krisztina
Than in Budapest; editing by Pravin Char and Tom Pfeiffer)
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