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VIENNA, June 25 (Reuters) - Austrian lender Erste Group said on Tuesday it would set aside up to 230 million euros ($262 million) for a lost legal case in Romania.
The provision comes as a result of a Romanian High Court decision concerning the business activities of local building society BCR BpL, a subsidiary of Erste Group’s subsidiary BCR, the bank said.
The court ruled that BCR BpL did not comply with legal requirements for paying state subsidies to building society clients, overturning a lower court ruling, an Erste Group spokesman said.
“This ruling was a big surprise for us,” he said, adding that BCR BpL will wait for the court to disclose its justification before deciding how to further defend its rights.
Erste Group said that despite this negative one-off effect it is still aiming for a return on tangible equity of above 11% in the 2019 financial year due to strong operating and risk performance so far this year.
Erste Group’s shares traded 1.94% lower at 31.87 euros at 0830 GMT, while the European sector index was down 1.03%. ($1 = 0.8773 euros) (Reporting by Kirsti Knolle Editing by Michelle Martin)