Bogza, Bancpost: Another tough year ahead, end of crisis is not in sight

2010 is another difficult year, with negative surprises to be expected once again in terms of profitability, as the end of the crisis is not clear in sight, says Mihai Bogza, chief executive of Bancpost.
His pessimism comes in the context where the state is seeking to implement cost-cutting measures in the public sector, after the last two years have only seen the private sector adjust during the crisis. The public spending cuts will, however, affect the entire economy.
“This year may come with big surprises as far as profit is concerned, either up or down. I fear it will most likely be down, and, if market conditions worsen, we will prefer to set up significant provisions, even at the risk of affecting profitability. The bank’s solvency, though at a very high 19%, does not seem excessive to us, considering that the end of the crisis is not in sight,” Bogza says.
Greek financial group Eurobank, Bancpost’s owner, reported a 2.1 million-euro profit in the first quarter of the year, after posting 4 million-euro losses in the last quarter of 2009.
The profit came in the context where 63 million-euro loans became non-performing, compared with 80 million euros in the first quarter of 2009.