Crédit Agricole to quit Hungary
FRANCE’s Credit Agricole is closing its 20-year-old Hungarian investment banking unit, the latest sign that European banks are pulling out of profitable emerging markets to meet new capital adequacy rules back home. Russian financial group seem to be interested in the Hungarian branch office.
20 February 2012
Crédit Agricole (CA) has shut up shop and has started preparations to pull out of Hungary - the bank's press department confirmed in Paris. As it is known, Jean-Yves Hocher - Deputy Chief Executive Officer, Head of Corporate and Investment Banking and Private Banking - announed in a press release in last Decemberthat the bank's revised strategy would be the major target-restrictor. The bank wants to make corporate and investment banking more successful through 32 countries focused only where 85% of world's GDP accounted for. Crédit Agricloe will place more emphasis particularly on developed capital markets. This means that the CA is closing branches in 21 countries - including Hungary. Also, CA to lay off 1750 employees due to new business policy.
In Budapest, the branch office's closing date has not been defined yet, but the bank has already made contact with existing clients and informed them that the bank decided to leave Hungary. The branch is not bound to make new deal by new regulation, but it is to serve the existing customers - told the press department.
The Hungarian branch office's about 60 employees are downsized by both the Hungarian and French labour regulations's requirements which are far-reaching taken into account. It is expected that the forced employees to leave will receive a generous package from the bank. According to market news, a Russian financial group is interested in the Hungarian branch.
The Crédit Lyonnais had already been participated in Magyar Hitel (Hunarian Credit) organised by the Rothschild in 1874, which aimed to finance development of new Budapest after unification of Pest and Buda taken place in 1873. The French bank opened the first office in January 1990 - after political changes in Hungary - which became a bank in July 1992. The financial institution from October 2007 - after the parent company mergedd - rebranded as Calyon and set its branch office. From February 2010, again rebranded as Crédit Agricole Corporate and Investment Bank and operated as as branch Office in Hungary. The company is the reginal headquartner of bank's corporate cash management business in Central and Eastern Europeans as well.
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