Hopeful Expectations at Erste Bank

Erste Bank Hungary set aside HUF 17 billion in risk costs in the first half of the year, reducing the bank's profit to almost zero. But they say: the situation is already improving.

“We have conceded one goal, maybe there will be another, but we will win this match,” Jelasity Radován, President and CEO of Erste Bank Hungary said at the bank’s online press conference this Wednesday. This is the first time that Erste has calculated a risk cost of HUF 17 billion after a four-year hiatus, hvg.hu reports.

Profit after tax decreased to HUF 27 million – except for this amount, all results were recorded as risk costs in the first quarter. Erste's operating revenues remained almost unchanged, declining by one thousandth, while operating expenses increased by 8%.

The retail loan portfolio increased from HUF 91 billion last year to HUF 139 billion. The new corporate loan portfolio decreased from HUF 96 billion to HUF 82 billion. Erste estimates that there will be no significant risk costs for the rest of the year.

László Harmati, the bank's deputy chief executive officer for retail, spoke about the fact that new lending for mortgages will no longer reach the 2019 level. So far, the growth is 7% compared to the first half of 2019, but it consists of a good first quarter, a weaker April-May, and a particularly bad June with a 23% decline, which means the trend is bad. Recent data already show a slight increase, but the figures are lower than last year.