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Erste: Business in Romania could reduce the profit by 64%

The Austrian financial group Erste, the majority shareholder of BCR could present for Q2 of this year a net profit of business in Romania of 28 million euro, dropping by 63.2% against the same period of 2008, a survey made by Reuters shows.

Seven analysts provided estimates connected to the profit of Erste Group in Romania, covered between 10 million euro and 42 million euro for Q2, the average being 28 million euro.
During Q2 of 2008, Erste got a net profit of 76 million euro in Romania, while for the first three months of this year, the profit was 42 million euro.

The drop in profit in Romania for Erste Group is connected to the advance of provisions for risks connected to loans, estimated at 81 million euro for Q2, three times over the level of Q2 of 2008, according to the average of estimates of three analysts who participated in the Reuters survey.
The net income of interests is estimated for Q2 at 194 million euro, up by 2.1% against the reference period of 2008.
For the whole year 2009, the analysts estimate a drop of net profit by 45.4% at 131 million euro, the estimates being covered between 49 million euro and 211 million euro. The net income out of interests is estimated to go up by 9.4% in 2009, at 812 million euro.
For Erste Group Bank, the analysts anticipate a net profit of 180 million euro for Q2 dropping by 43.9% against the same period of 2008, the level representing the average of estimates of 13 analysts. The provisions for risks connected to loans are estimated at 452 million euro, two times over the level of Q2 of last year.
The level of non-performing loans at the level of Erste group is estimated to go up between April and June 2009 at 6.4% out of total loans, from 2.4% a year before and from 3.3% during Q1 of this year. At the end of the year, the level of non-performing loans could reach 7.3% anticipate the analysts inquired by Reuters, the most pessimistic prognoses indicating a level of 7.7%.
During Q1 of this year, Group BCR obtained a net profit after taxation and the payment of minority interests of 330.3 million lei ( 78.3 million euro) with 13.7 % les than that of the similar period of last year, while Erste presented a net profit after payment of minority interests of 232.1 million euro, dropping by 26.5%.
Erste Group Bank owns 69.3063% of the BCR shares. Erste and BCR will publish their results for Q2 on 30 July.

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