Erste mulls selling loss-making Ukrainian unit

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

"Ukraine has not lived up to (our) expectations of economic development and the group is considering the question of whether it 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 left Ukraine or are reducing local exposure.

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

Erste bought a small bank in Ukraine in 2006 and as of July 1, 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 since the 2008-2009 crisis when the Ukrainian hryvnia fell 60 percent against the dollar. The bank has reported losses since 2010.

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

(Reporting by Olzhas Auyezov; Editing by David Cowell)

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