Provisions for eight big projects led OTP to 23m-euro losses

OTP Bank, the local subsidiary of the biggest Hungarian financial group, ended last year with a 23.2 million-euro loss, six times higher than in 2009, after setting up nearly 58 million euros in provisions to cover potential losses from non-recovery of loans.
"Almost the entire loss was generated by no more than eight big exposures, 70% of which are real-estate-related," Laszlo Diosi, CEO of OTP told ZF. In the fourth quarter, the bank posted eight million euros in losses, similar to the loss recorded in the third quarter, according to data published by the OTP group.
Diosi says the bank revised its budget in July 2010, when it became obvious that the economy was not recovering, and the final result is in line with the one anticipated then.
"For this year we expect much lower provisions, because we have already covered all problematic exposures. Yet it must be said that as far as 2010 provisions are concerned, in many cases we expect to recover significant amounts or even the full amount." Provision costs were double last year against 2009.