Investors punish Erste for new emerging Europe hit

More than €1 billion wiped off group’s market value

 Erste was the biggest loser among European bank stocks, tumbling more than 16 per cent. Photograph: Leonhard Foeger/Reuters

Erste was the biggest loser among European bank stocks, tumbling more than 16 per cent. Photograph: Leonhard Foeger/Reuters

Fri, Jul 4, 2014, 18:14

Investors wiped more than €1 billion off Erste Group’s market value and took evasive action against rivals on concerns the bank’s warnings about Hungary and Romania could echo across the sector.

Austria’s Erste, emerging Europe’s third-biggest lender, said late yesterday it could post a record net loss of up to €1.6 billion this year due to a law cutting bank charges in Hungary and higher provisions for soured loans in Romania.

The charge in Romania was due to the central bank there clamping down on non-performing loans ahead of a European Central Bank review of large European banks, Erste said. The Romanian central bank declined to comment.

Erste was the biggest loser among European bank stocks, tumbling more than 16 per cent to a 12-month low of €19.52 in afternoon trading. – (Reuters)