By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Austria's benchmark equity index slid by the most in four months on Friday, pressured by a drop in Erste Group Bank AG, as volatile conditions in Hungary and Romania led the bank to warn of an hefty annual loss.

Erste Group Bank tumbled 15% to 19.93 euros ($27.12) after it said it expects to post a net loss of EUR1.4 billion to EUR1.6 billion for 2014. The loss would come as a result of higher provisions for the Hungarian and Romanian units, and annual risk costs will be pushed up to EUR2.4 billion from the previously expected EUR1.7 billion, said Erste.

In Hungary, the government is aiming to cut charges by banks on foreign currency mortgages to aid homeowners struggling in the wake of a weakening in the Hungarian forint. Meanwhile, the Romanian National Bank is working to reduce nonperforming loans before an asset-quality review by the European Central Bank.

Austria's ATX stock index fell 3% to 2,451.72.

Tracking the broader European market, the Stoxx Europe 600 index shed 0.1% to 348.44, led by losses for Erste.

In Paris, the CAC 40 equity index fell 0.2% to 4,479, and Germany's DAX 30 slipped 0.1% to 10,018.

But seeing gains Friday were shares of EasyJet PLC , higher by 2.4% after the British budget airline said the number of passengers it carried in June rose 10.1% to 6.1 million, compared with the year-ago period.

EasyJet topped the U.K.'s FTSE 100 , but the index overall was off less 2 points at 6,862.

Meanwhile, British government-services provider Serco Group PLC said Friday it lost a rebid to operate the Docklands Light Railway in London. Its shares declined 0.7%. Serco will continue to service the line through Dec. 7. The DLR franchise generated revenue of about 90 million pounds ($ 154.3 million), or 2% of Serco's overall revenue, at a margin that was well below the average Serco logs on its contracts, it said.

Elsewhere in Europe, shares of Let's Gowex SA remained suspended for a second day in Madrid. The shares tumbled more than 70% on Tuesday and Wednesday combined after short-seller Gotham City Research LLC said it believes that more than 90% of revenue reported by the free public Wi-Fi provider "does not exist." Gotham City "does not trust Gowex's reported revenues, and believes Gowex is too good to be true," it said, adding that it estimates actual revenue to be less than EUR10 million.

Gotham City's claims are "unfounded and defamatory," Gowex said in a Thursday statement, and said it's preparing a report of relevant facts to clarify the company's position.

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