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Provisions eat up Erste Bank Hungary H1 earnings

Erste Bank Hungary broke even in the first half as provisions for expected impairment wiped out earnings, chairman-CEO Radovan Jelasity said at a press conference on Wednesday, according to a report by state news wire MTI.

Risk provisions came to HUF 17.2 bln in H1, compared to a provisions release of HUF 4.8 bln in the base period, Jelasity said. The lender has had to set aside provisions, rather than release them, for the first time since 2015, he added.

Erste does not expect significant risk costs for the rest of the year, he said.

The lender had an after-tax profit of HUF 25.1 bln in the base period.

Ersteʼs non-performing loan ratio fell to 2.1% at the end of June from 2.9% twelve months earlier, but that ratio is expected to rise again after the government-mandated moratorium on loan repayments ends, Jelasity said.

The moratorium expires at the end of 2020.