UniCredit Tiriac, a top ten player controlled by one of the mostpowerful European groups, has seen its first-quarter net profit cutin half, to almost 16 million euros, because of the 150% increasein loan-loss provisions, amid the extension of recession.
"The market context was difficult for the banking system, withRomania remaining in recession in the first quarter. The creditrisk continued to rise, fuelled by the large number of cases ofnon-payment among companies," says Rasvan Radu, chief executive ofthe bank. Calculated in line with local accounting standards, thenet profit amounted to 61 million RON (almost 15 million euros),compared with 64 million RON according to IFRS.
In the first quarter of 2009, the bank set up 23 million euros inloan-loss provisions, compared with 9 million euros in the sameperiod of 2009.
This is the largest quarterly volume of provisions set up by thebank.
The bank's operating profit fell by 9% to 41 million euros amidconstant operating costs - 34 million euros, but amid a 5% revenuedecline, to 75 million euros, especially due to the fall inearnings from treasury operations, which fetched a lot of moneylast year because of market volatility.
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