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September 18, 2020
BUSINESS

Diosi, OTP Bank: Romanian state did not help commercial banks

OTP Bank Romania head Lazslo Diosi yesterday stated the Romanian state had not assisted commercial banks, has no money to retrieve from them, therefore the planned surtax could as well be directed at any other sector such as telecom, for example, Mediafax reports. The bank official also stressed out that the legislation as is now helps companies and not banks in insolvency proceedings, making it difficult for lenders to recover their money and place it back on the market as new credit. Moreover, Diosi noted that, after the introduction of international financial reporting standards (IFRS), the banks would automatically be paying bigger corporate profit taxes. He said BNR had chosen not to introduce the IFRS to the banking sector as yet, for it wanted to give banks more time to achieve better stability and better capital levels, which was a ‘wise’ thing to do.


His conclusion was that there is an idea going on in Romania suggesting banks should pay more, without known the purpose or who will be in fact paying. On the other hand, Diosi says any income and profit tax hikes will have a much stronger negative affect that a VAT increase would. He is not worried that the value-added tax may be increased as he regards it as the most natural way of solving budget revenue shortages.


On the other hand, OTP Bank Romania this year will make a smaller profit than in 2009 and will increase assets by 3-5 per cent, in a context where lending started recovering later than it had anticipated and the bank has not resorted to personnel or territorial network-related cost cuts, the CEO of OTP Bank Romania also stated during a meeting held for the presentation of the bank’s annual report. He also mentioned that the 2011 outlook looked definitely better than 2010 one.


OTP Bank Romania’s after-tax profit last year grew by over four times and a half, from HUF 241 M (EUR 900,000) in 2008 to HUF 1.1 bln (EUR 4.1 M). The bank closed Q1 on zero after-tax profit. The head of the OTP Bank Corporate Division, Dragos Mirica, expects the bank will grow its corporate credit balance by 2 to 5 per cent this year.


In addition Diosi said the market and economy trend was not yet very clear and that, initially, the bank had anticipated lower risk-associated costs in H2 this year, scenario that is no longer valid. He emphasized the bank would remain ‘committed’ to expansion and that Romania was ‘the peak of priorities’ for the Hungarian group’s management.

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