Erste Group losses in Hungary widen
Tuesday, July 31, 2012, 1:55 PM CET
Erste Group booked a €72.7 million net loss at its business in Hungary in the first half, growing from a €51.2 million loss in the same period a year earlier, the banking group said in its H1 report on Tuesday.
Net interest income fell 7.0% to €175.9 million. Erste Group said the decline caused by a government scheme allowing early foreign currency-denominated mortgage repayments at discounted exchange rates was offset by a shift of interest income from trading assets to net interest income.
Net fees and commissions dropped 7.6% to €45.3 million.
Risk provisions for loans and advances fell to €106.6 million in H1 from €154.6 million in the base period. Erste Group said the decline was triggered by legislative changes to a subsidy scheme for retail borrowers with FX loans applicable for the coming five years.
Average risk-weighted assets of the business in Hungary came to €3.489 billion in the period.
The Hungarian business's cost-to-income ratio improved to 38.2% from 41.4%.
Headcount at Erste Bank Hungary Group was 2,598 on June 12, down 11.9% from December 11 of the previous year.