Erste Hungary's net loss shrinks 88% y/y in Jan-Sep on lower risk provisions.

By bne IntelliNews October 31, 2012
The Hungarian unit of Austrian Erste Bank posted a net loss of EUR 64.1mn in January to September 2012, down 87.9% from a net loss of EUR 531.7mn recorded a year earlier, the parent bank said in a statement. This significant improvement was mainly due to a higher base effect on account of risk provisions. The bank booked EUR 147.1mn in risk provisions in Jan-Sep 2012, down from EUR 701.3mn in the same period of 2011, when it allocated additional provisions related to the early repayment of foreign currency-denominated mortgages at below market rates coupled with challenging economic environment. Erstes net interest income dropped 15% y/y to EUR 257.6mn and its income from net fee and commission was also down 8.1% y/y to EUR 67.8mn in Jan-Sep 2012. Losses under other result soared 87.4% y/y to EUR 107.4mn which was again mainly due to changes in Hungarys legal framework. The NPL ratio deteriorated to 25.3% at end-September 2012, from 16.5% at end- September 2011 and 21.1% at end-2011. On the positive side, the lender managed to cut administrative spending by 20.9% y/y as the bank reduced the headcount by 11.3% y/y to a total of 2,614 employees at end-September 2012. Erste Hungary has earlier announced a number restructuring measures in response to the deteriorating revenue outlook along with lower lending activity, higher provision-requirements, higher expenses resulting from the bank levy and the early loan repayment scheme and rising risks due to the adverse external environment.
Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

Assets of Hungarys investment funds up 3.2% m/m in Feb 2013.

Hungary's investment funds had aggregate assets of HUF 3.657tn (EUR 11.98bn) as of end-February 2013, up by 3.2% m/m, MTI news agency reported citing data from the association of investment funds ... more

Hungary's number of employees down 0.6% y/y in Jan 2013.

The number of employees in Hungary's public and private sectors fell for the tenth straight month in January 2013 declining by 0.6% y/y to 2.574mn, the statistics office informed. The decline ... more

Hungarys MVM clears deal for purchasing E.ONs local units.

The assembly of state-owned Hungarian Electricity Works (MVM) has approved the purchase of the local gas business of German power utility E.ON, Hungary AM reported, citing local daily Magyar ... more