Hungarian bank MKB hikes risk provisions
Hungarian bank MKB, a unit of German group BayernLB, on Monday more than doubled its risk provisions in the first six months owing to the poor economic outlook for central and eastern Europe.
"We view the short-term outlook as rather sombre and for this reason, we have opted to tangibly increase our risk provisions," MKB said in statement.
The bank said it had set aside 77.5 billion forint (273 million euros, 347 million dollars) for bad or risky loans in the first six months, compared with 29.7 billion forint (104 million euros) a year earlier.
Earlier, the German parent Bayerische Landesbank had said that MKB accounted for nearly two thirds of its own first-half risk provisions of 355 million euros.
"The exchange rate volatility that we have seen for months now is having a negative effect on our customers' solvency," MKB chief Tamas Erdei said.
Furthermore, there were still no signs of a turnaround in private consumption or unemployment, Erdei added.
© 2010 AFP