OTP boasts 4.58m-euro profit

OTP Bank, the Romanian branch of the largest Hungarian financial group, stepped into the black in the second quarter of the year, posting 4.58 million euros in net profit, after no longer setting up loan loss provisions. In the first quarter, the bank had recorded a 2.4 million-euro loss, especially due to the abrupt rise in provisions set up as a result of the deterioration of loans granted to individuals. OTP ended the first half with 2 million euros in net profit, compared with a 4.7 million-euro loss in the similar period of 2008. The Hungarians managed to end 2008 with a profit, based on second-half earnings. “We believe provisions are at a normal level. A shock occurred in the first quarter, with individual clients being significantly affected by the strong depreciation of the RON, which overlapped with the high inflation and the diminished incomes,” Laszlo Diosi, chairman and general manager of OTP Bank Romania told ZF.

In the second quarter, the bank logged 90,000-euro net interest income from the release of sums set aside as loan loss provisions, with the bank funnelling 6.8 million euros to provisions in the first quarter. Diosi outlined the positive impact of the programme dedicated to providing support to clients, implemented in May and June – which saw the instalment payment date changed, the repayment period extended or even a grace period granted to the newly unemployed.