OTP Bank, the local subsidiary of the biggest Hungarianfinancial group, ended last year with a 23.2 million-euro loss, sixtimes higher than in 2009, after setting up nearly 58 million eurosin provisions to cover potential losses from non-recovery ofloans.
"Almost the entire loss was generated by no more than eight bigexposures, 70% of which are real-estate-related," Laszlo Diosi, CEOof OTP told ZF. In the fourth quarter, the bank posted eightmillion euros in losses, similar to the loss recorded in the thirdquarter, according to data published by the OTP group.
Diosi says the bank revised its budget in July 2010, when it becameobvious that the economy was not recovering, and the final resultis in line with the one anticipated then.
"For this year we expect much lower provisions, because we havealready covered all problematic exposures. Yet it must be said thatas far as 2010 provisions are concerned, in many cases we expect torecover significant amounts or even the full amount." Provisioncosts were double last year against 2009.
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