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K&H Bank group profit plummets 73%

First-quarter net income of Hungary's K&H Bank group plunged 73% to €10 million from the same period a year earlier as impairment losses ballooned, K&H Bank group's parent, Belgium's KBC, said in its Q1 report.

Net interest income rose 50% to €99 million.

Hungary's base rate was 9.50% for most of Q1 2009, well over the 7.50% rate in Q1 2008. The average forint/euro exchange rate was 294 in Q1 2009, far weaker than the average rate of 259 in Q1 2008.

Net income from fees and commissions slipped 28% to €18 million.

Operating costs increased 17% to €76 million.

KBC's unit in Hungary wrote off €36 million of bad loans in Q1, compared to just €1 million in the same period a year earlier.

KBC loan loss reserves in Hungary grew to 1.99% in Q1 from 0.41% in 2008. The ratio of non-performing loans was 1.9%, or €133 million, at the end of Q1. “High-risk” loans made up a further 7.5%, or €528 million, of the portfolio.

Pre-tax profit dropped 67% to €19 million. (MTI – Econews)