2010 is another difficult year, with negative surprises to beexpected once again in terms of profitability, as the end of thecrisis is not clear in sight, says Mihai Bogza, chief executive ofBancpost.
His pessimism comes in the context where the state is seeking toimplement cost-cutting measures in the public sector, after thelast two years have only seen the private sector adjust during thecrisis. The public spending cuts will, however, affect the entireeconomy.
"This year may come with big surprises as far as profit isconcerned, either up or down. I fear it will most likely be down,and, if market conditions worsen, we will prefer to set upsignificant provisions, even at the risk of affectingprofitability. The bank's solvency, though at a very high 19%, doesnot seem excessive to us, considering that the end of the crisis isnot in sight," Bogza says.
Greek financial group Eurobank, Bancpost's owner, reported a 2.1million-euro profit in the first quarter of the year, after posting4 million-euro losses in the last quarter of 2009.
The profit came in the context where 63 million-euro loans becamenon-performing, compared with 80 million euros in the first quarterof 2009.
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