Erste: Romanian results are good; Hungary, a pleasant surprise

Erste officials said that the markets are in full real economy crisis, but added that Central and Eastern Europe is nearing the end of the downward trend.

“The recession is severe, but it is not Armageddon. The packages from the International Monetary Fund have had a stabilizing effect on currencies, such as the leu and the forint. In Romania, results were satisfactory, but those registered in Hungary were a pleasant surprise,” said Erste Bank’s Chief Executive Officer, Andreas Treichl, quoted by The Money Channel.

The Czech Republic is Erste’s most profitable market, followed by Romania and Hungary. Here the Austrian group registered the lowest profit drop rate, as operations on this market generated earnings of €41.3 mln, 14 percent less than the level posted in the first six months of last year.

BCR’s results were affected by an increase in non-performing loans, which led to a tripling of risk costs in the past year, up to €186 mln.

“These results reflect the extremely difficult conditions which our clients are facing. Despite this situation, the bank managed to improve its operating performance by over 10 percent compared to the first half of 2008,” BCR’s CEO, Dominic Bruynseels, said.

“The Romanian economy continued to slow, which inevitably affected income and consumer behavior of our individual clients. The rise in unemployment and the reduced working hours are influencing large areas in Romania, as well as the cash flows and profitability of companies,” according to a bank statement.