OTP Bank, the domestic subsidiary of Hungary's biggest financialgroup, posted net losses of almost 7.5m euros in the secondquarter, after it had to set up provisions topping 16m euros,mainly as several large real estate clients enteredinsolvency.
The bank had ended the first quarter with zero profit, after havingmade 4m-euro income last year.
"We've been coping with clients' problems for months, but whatcaused current losses was the insolvency of several major realestate clients, no more than six," Laszlo Diosi, general manager ofOTP Bank, commented for ZF.
He says the real estate market is still frozen, nobody is makingany investments, and companies are losing their breath.
"Except real estate clients, the others are doing well, revenuesare good and the quality of new loans is very good. We have notrouble with loans granted this year," Diosi also says.
Diosi says now that he expects the bank to end 2010 with a net lossbecause of high provision expenses, after having derived profit inthe past two years. The bank had originally budgeted profit forthis year.
"We will not end this year in the black. It will be clearly anegative figure, but I do not know how big it will be. Everythingdepends on provisions, because operating income is very good," saysDiosi.
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