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Garantiqa has HUF 1.9 bln loss in 2009, expects to stay in red in 2010

Garantiqa Hitelgarancia, a guarantor of loans for SMEs owned by the state and credit institutions, had a loss of HUF 1.9 billion in 2009, it was revealed at a general shareholders meeting.

Shareholders approved the CEO's report on the losses which resulted from increasing risks because of the crisis.

 Garantiqa aims to support the availability of credit to more SMEs and this can only be done with an increased degree of risk in a time of crisis, the guarantor said in a statement sent to MTI.

Garantiqa now provides guarantees for 14% of all SME lending stock in Hungary, up from 8%-9% before the crisis.

Garantiqa's growing market role, its low fees and the increasing number of borrowers who default on their loans will generate losses in 2010 too, according to the business plan, which shareholders also approved.

“We will put the company on the profitable track in 2011, but in order to do this, steps must be taken this year,” CEO György Radnai said. “We raised fees in March and further measures could be necessary,” he added.

Between 2005 and 2009, Garantiqa signed 125,000 contracts, providing guarantees of HUF 1,150 billion on HUF 1,400 billion of loans taken out by 49,000 SMEs. Fees for the guarantees came to HUF 18.5 billion. Garantiqa paid lenders HUF 66 billion for defaults by borrowers it guaranteed during the period. (MTI – Econews)