Volksbank International posts EUR 36mn loss in Romania in 2010 - report.

By bne IntelliNews March 7, 2011
The Romanian operations of Volksbank International (VBI), the banking division of Oesterreichische Volksbanken that was recently put up for sale, generated a EUR 36mn loss in 2010, chief executive Friedhelm Boschert said in an in-house interview, obtained by Reuters. The bank derived profits from the other nine regional branches, but the group's overall result remained negative at EUR 21.8mn. Ziarul Financiar daily reported that Volksbank Romania declined comment, saying only that this data is preliminary, while official results will be available at the end of the month. Volksbank Romania expanded aggressively through mortgage lending in the period 2006-2008 and was among the three largest local lenders in terms of assets at the end of 2008. However, the bank has lost some market presence since then and dropped five places in terms of market share by the end of 2010, when its assets stood at EUR 4.6bn. Amid losses generated by high provisions, the bank has recently restricted its lending activity. The share of bad loans in its portfolio stood at 25% in March 2010, which was the highest in the local banking system.

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