Updates prices, add Polish data, analyst comments

By Jason Hovet and Krisztina Than

PRAGUE, March 20 (Reuters) -Hungary's forint hit an 11-week low andWarsaw's blue-chip index fell to its lowest in over four months on Monday before each recovered some ground amid market volatility afterCredit Suisse's state-backed rescue.

Banking shares fell across Europe aftera weekend that saw the rescue of Credit Suisse CSGN.S by UBS UBSG.S and a coordinated central bank effort to safeguardglobal cash flows.

In central Europe,some Polish banks and Hungary'sOTP Bank OTPB.BU lost more than5% in early trade before settling to trade down 1-3% on the day.

UBS's state-backed takeover of Credit Suisse Group was orchestrated to try to restore confidence in a battered sector, although investor focus shifted on Monday to the massive hit some Credit Suisse bondholders will take.

Swiss authorities brokering the merger have said 16 billion Swiss francs ($17 billion) of Credit Suisse's Additional Tier 1 (AT1) debt will be written down to zero.

"The question arises who owned these securities and who will be affected by the consequences of Credit Suisse takeover and the redemption of these securities," mBank analyst Michal Konarski said in reference to the drop in Polish bank shares.

Warsaw's WIG 20 index .WIG2 was off session lows by midday, trading down 1.1% at 1139 GMT after falling more than 2% earlier in the day.

Prague's stock index fell over 1% to hit a two-month low before cutting some losses. Listed lenders Komercni Banka and Moneta Money Bank were down 1-2%, in line with other banks in Europe.

Banks have built up defences since the 2008 global financial crisis.

Czech central bank Vice-Governor Jan Frait was quoted as saying in an interview with Hospodarske Noviny published on Monday that Czech banks had no significant ties to Credit Suisse and that risks to the domestic sector were small or negligible.

Among currencies, the forint EURHUF= led losses, bouncing aroundthe sensitive 400 per euro level, and was down0.5% at 399.65 at midday. The forint has given up all of its 2023 gains - which had been around 7% - this month.

"Negative news has a much bigger impact on the forint, which is due to its high 'Beta', and to the fact that its gains since the start of the year were due to the inflow of hot money," Magyar Bankholding said.

Hungary's central bank has maintained an 18% quick deposit rate since last October, when the forint hit record lows beyond430 to the euro. Its base rate of 13% is also the highest in the European Union.

Elsewhere, the Czech crown EURCZK= inched to the firm side of24 per euro, buthas fallen over 1% in the last week. Poland's zloty EURPLN= was steady on the day at 4.7015to the euro, withcorporate wage data from February providing support.

Reporting by Jason Hovet in Prague, Krisztina Than in Budapest, and Anna Banacka in Gdansk; editing by Barbara Lewis

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