Austria's Raiffeisen Bank posted a 33 million-euro net profitfrom operations conducted in Romania in the third quarter of theyear, up over 6 times against the profit recorded in the similarperiod of 2009.
Operating profit went up by 6.1%, to 121 million euros, but thesignificant increase in net profit was sustained by the halving ofprovision costs for bad loans, to 19 million euros, from 40 millioneuros in the third quarter of 2009. However, provisions were morethan 10% higher against the second quarter of 2010.
How did Raiffeisen manage to cut its provision costs?
"An improvement in the loan portfolio, restructuring steps andselling non-performing loans have been behind this decline,"according to the nine-month report published in Vienna, whichmentions that the January-September period saw much lowerprovisions allocated than the similar period of 2009 both forcorporate loans and for retail loans. Non-performing loans make up8.6% of the total.
The bank mostly sold retail loans. Raiffeisen's overall assets fellby 144 million euros in the third quarter, while the first ninemonths saw assets down by nearly half a billion euros.
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