Hungary's OTP sees 4m-euro net income in 2009

OTP Bank, the Romanian subsidiary of the biggest Hungarian
financial group, last year reached net income worth 4m euros, more
than four times bigger than the level of 2008, the first profitable
year for the bank. Income rose despite some high provision costs,
with the bank managing last year to considerably bolster its
operating revenues and also slash operating expenses. Credit risk
provisions totalled 10m euros last year, from 12m euros in 2008, in
the context where loans overdue more than 90 days doubled their
weight, to 3.4% in the overall portfolio, according to the report
OTP Bank published in Budapest. “We see a slight but ongoing
deterioration of loans to small firms. The first half will bring
further bankruptcies among small firms,” says Laszlo Diosi, general
manager of OTP Bank Romania. In its report, the Hungarian bank
points out the Romanian subsidiary has the lowest weight of bad
loans in the portfolio. Operating income reached almost 25m euros
last year, compared with 14m euros in 2008, despite the slight
contraction in the loan portfolio.