Erste CEO retains positive outlook on Hungary
Despite his previous characterization of the political/economic situation in Hungary with regard to his bank as an “ordeal,” Erste Group CEO Andreas Treichl remaining optimistic on the country in reporting his company’s third-quarter results.
In a conference call falling the reportage of results, Treichl said he was “hopeful” that an agreement between Hungary-based banks and the local government on the forex-based loan bailout scheme would be reached within the next few weeks.
Local business news outlet Portfolio.hu was slightly aghast at a Reuters report on Treichl’s conference call: “Treichl’s words come as quite a surprise after a statement by National Economy Minister Mihály Varga … who claimed the solution proposed by banks failed to address the two key problems the government had identified, therefore the latter was going to pursue its own solution.”
Erste Group on Wednesday reported that losses at its Hungary-based business widened to €100.9 million in quarters one through three in 2013, as compared to €64.1 million in the same period a year earlier.
Net interest income fell 22% to €201.9 million on higher refinancing costs for the foreign-currency business, a declining loan portfolio and falling market interest rates, Erste Group said. Net income from commissions and fees rose 29% to €87.2 million. Increased risk provisioning requirements for the retail segment raised costs by 9% to €160.1 million.
Erste Group said it paid €36.8 million on a financial transactions duty, introduced at the start of 2013, in the first nine months of the year. The amount included €16.3 million for a top-up after revenue from the duty fell short of the government's target early in 2013.
Overall net profit for Erste for the first three quarters dropped 28% year-on-year to €430 million; representatives cited higher costs in taxes and transactions fees in Austria and Slovakia as contributing to the decrease. Upticks in earnings in Romania and Serbia were also seen.
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