“The subsidiary in Romania was acquired at a very low cost level in 2001. There is no goodwill booked for this unit and consequently, RBI has no necessity to write down any goodwill for its Romanian operations,” Raiffeisen said in a statement, reacting to “the many questions received from the market as a consequence of today´s announcement by Erste Group.”
Earlier Monday, Erste said it will partially write down its Romania-related goodwill by EUR700 million pre-tax, reflecting a slower-than-expected economic recovery. The measure is part of a larger package of extraordinary charges that affect the presentation of its CDS portfolio, its Hungarian and Romanian operations, which are expected to turn the group’s profit of some EUR700 million for the first nine months into a loss of about EUR920-EUR970 million, Erste said in a statement.
Raiffeisen said that its balance sheet shows a very small goodwill amounting to only EUR3.5 million for its Hungarian bank, which will be written off this year.
It noted, however, that the changing and deteriorating macroeconomic climate will result in a challenging market environment, saying nonetheless it expects a profit for 2011. In the first six months, . Raiffeisen Bank International posted a consolidated profit (after tax and non-controlling interests) of EUR615 million.
In 2001, Raiffeisen and the Romanian American Enterprise Fund bought Romanian lender banca Agricola in a $52 million deal. The consortium paid $15 million for the stake owned by the Romanian government and added $37 million to the bank’s capital.