The Great Debate UK

from The Great Debate:

Ukraine too far east for western banks

-- Margaret Doyle is a Reuters columnist. The opinions expressed are her own --

Margaret DoyleIt's tough on Ukraine, but European banks should pull out. It may not be the only Eastern European economy giving its western bankers a headache but that country's political chaos and weak corporate governance outweigh the prospects of a return to growth.

Hungarians and Romanians, the bulk of whose loans are in foreign currencies, have seen their debts rise as their own currencies fall. And Sweden's SEB and Swedbank have taken a pasting in their neighbouring Baltic states.

Austria's Erste Bank managed to make a profit in the Czech Republic, Slovakia, Croatia, Serbia, Hungary and even Romania, (where it lifted bad loan provisions five-fold), albeit at a lower level than last year.

However, like the Swedes, it came a cropper in Ukraine.

The EU and the International Monetary Fund (IMF) have stepped in to the rot, but Ukraine is still floundering.