Volksbank, a player that has climbed into the top five by aggressive sale of real estate loans, posted a gross profit worth 18.3 million euros in the first quarter of the year. The pre-tax profit in the first quarter of 2008 amounted to 7.1 million euros. "Loan loss provisions went up, but in terms of profitability, we had the best quarter in our history," Gerald Schreiner, chairman of the bank, told ZF. The profit rise came amid cost cuts, especially by suspending territorial expansion and by renegotiating lease contracts and contracts with services providers. Volksbank, present on the Romanian market since 2000, set up 9 million euros in loan loss provisions in the first quarter of the year. "We will probably set up further provisions worth 32-33 million euros, i.e. a doubling against December 2008," Schreiner says. Consequently, the provisions will account for 2.2% of the overall credit portfolio. Even so, Volksbank stands by its 42 million-euro (gross) profit target for this year.
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