BUSINESS

OTP Romania estimates switch to profit in 2011, reverting to 2009 levels

OTP Bank Romania estimates it will switch back to profit mode this year, to a level close to the HUF 1.1 bln (EUR 4.2 M)-earnings reported in 2009, even if it makes higher provisions than two years ago, the bank’s director general, Laszlo Diosi, stated, quoted by Mediafax. He added that the bank’s provision margins would be “under stress”, owing to competition and to the evolution of interest rates on the inter-banking market, the “huge” liquidity level and the low ROBOR rate. Diosi explained that the losses reported for 2010 were produced by the significant rise of provisions, resulting from exposure on eight large companies, which was not compensated for by the rise in 41 pc in operating profit. For 2011, Diosi estimates a rise in loans granted by 8 pc, in the context in which crediting activity is already very strong on the corporate segment and there is a higher demand for working capital from small and medium-sized enterprises. When asked if OTP would enter the race to resume granting unsecured cash loans, Diosi answered in the affirmative, stating that the bank had approved, last week alone, 100 such loans, in the national currency.

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