Erste dismisses reports of financial trouble as rumour

Budapest (MTI) – Erste Bank Hungary has dismissed as “unfounded rumour” reports alleging that the bank’s financial position had weakened, and pledged to file a criminal complaint, said deputy chief executive Laszlo Harmati.

Harmati spoke in response to news that queues have formed in front of several Erste branches in eastern Hungary’s Debrecen after rumours circulated that the bank may file for bankruptcy protection imminently. Harmati told public television M1 that the bank’s liquidity and capital strength were stable and that its financial stability was not compromised.

Harmati said the source of the rumours had been identified and Erste would pass this information to the police.

Harmati said the bank had closed the fourth quarter already with a profit last year after paying out compensations to clients on losses derived from foreign currency loan contracts. He also cited as proof of the bank’s stable presence in and commitment to Hungary a February agreement with the EBRD and the state of Hungary, under which the two may each take a 15 percent stake in the Hungarian Erste Group in the near future.

Economy ministry state secretary Gabor Orban also told M1 that clients’ money at Erste was safe and the group’s financial position was stable. He dismissed speculation that the state was planning to buy into Erste because of a weakness.

“On the contrary: the State of Hungary intends to buy a 15 percent stake in the group because it is strong with promising growth potential and prospects,” he said.

National Bank of Hungary (NBH) deputy governor Adam Balog also stressed that the rumours were baseless. He said the Hungarian banking system had a high level of stability, and the operations of all significant banks, among them Erste were safe.

Source: http://mtva.hu/hu/hungary-matters