OTP returns to profit

OTP Bank, the domestic subsidiary of Hungary’s biggest financial group, managed to return to profit with a half a million euro income in the first quarter of 2011 after having piled up losses during last year, particularly owing to falling provision expenses.
“Things are looking good. We even had a company that entirely paid back a large loan, after two years when we struggled with reschedulings,” says Laszlo Diosi, head of OTP Bank Romania.
Provision expenses totaled EUR4.7 million in the first quarter, EUR2 million less than in the same period of 2010. In the first quarter of last year provisions had registered a record leap of almost EUR20 million.
“The profit (in the first quarter i.e.) was mainly the result of the plunging risk cost. While the weight of loans past due by more than 90 days climbed to 11.2% in March, the first quarter of 2011 brought the slowest deterioration of the past five quarters,” comment OTP group analysts in the quarterly report sent to the Budapest bourse.