Erste mulls selling loss-making Ukrainian unit

KIEV, Oct 8 (Reuters) - Austria's Erste Group Bankcould decide by the end of the year to sell its loss-makingUkrainian unit.

"Ukraine has not lived up to (our) expectations of economicdevelopment and the group is considering the question of whetherit should continue working on the Ukrainian market," Erste Bank(Ukraine) spokeswoman Yelena Pavlovskaya said on Monday.

She said a decision could be made by the end of this year.

Several other banks from Western Europe have already leftUkraine or are reducing local exposure.

"We are analysing the market now, the option of selling thebank is being considered but the option of staying in the marketis being considered as well," Pavlovskaya said.

Erste bought a small bank in Ukraine in 2006 and as of July1, 2012 it had assets of 9.8 billion hryvnias ($1.2 billion),making it the 22nd largest lender among Ukraine's 176 banks.

Like many other Ukrainian banks, Erste has struggled sincethe 2008-2009 crisis when the Ukrainian hryvnia fell 60 percentagainst the dollar. The bank has reported losses since 2010.

Sweden's SEB and Swedbank have closed down retail operationsand Germany's Commerzbank is selling its local subsidiary Forumto Ukrainian businessmen.

(Reporting by Olzhas Auyezov; Editing by David Cowell)

((olzhas.auyezov@thomsonreuters.com)(+380 44 244 9150))