OTP Bank, the domestic subsidiary of Hungary's biggest financialgroup, managed to return to profit with a half a million euroincome in the first quarter of 2011 after having piled up lossesduring last year, particularly owing to falling provisionexpenses.
"Things are looking good. We even had a company that entirely paidback a large loan, after two years when we struggled withreschedulings," 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 firstquarter of last year provisions had registered a record leap ofalmost EUR20 million.
"The profit (in the first quarter i.e.) was mainly the result ofthe plunging risk cost. While the weight of loans past due by morethan 90 days climbed to 11.2% in March, the first quarter of 2011brought the slowest deterioration of the past five quarters,"comment OTP group analysts in the quarterly report sent to theBudapest bourse.
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