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Provisions slow down: monthly growth, no higher than half a billion lei

Autor: Liviu Chiru

10.04.2011, 23:46 12

The monthly growth pace of provisions started to slow down fromthe fourth quarter of 2010, and February brought bankers a newbreath of fresh air.

Provision expenses reached 203m lei (48m euros) in February,half the January level. Since last September, provisionexpenditures have not exceeded half a billion lei monthly, half thepace registered between May and August 2010.

Thus, bankers' expectations for the provisioning effort to easeup gradually during this year are confirmed.

However, despite the slowing advance, the provision stock isstill setting all-time peaks from one month to another. InFebruary, it reached 24.3bn lei (5.8bn euros), accounting thus for11.9% in overall loans granted to clients outside the bankingsector.

"The cost of risk has stabilised on the corporate segment, butunfortunately not for mortgages, as well. Provisions skyrocketedafter the adjustment moves the government made last summer, butthey are now stabilising. On the SME segment, bad loans havestopped rising," says Laszlo Diosi, OTP Bank head.

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