“In 2013 you have already seen the effects of the efficiency program that we started, some of it already in the last quarter of 2012,” said Andreas Treichl, Chief Executive Officer of Erste.
Speaking at a news conference, Treichl said that most of the costs related to BCR’s restructuring program have been booked in 2012.
“The net effects will be visible in a much stronger form in 2013,” Treichl said.
BCR reported a loss of 1.2 billion lei (EUR277 million) in 2012, versus profits a year earlier, hurt by a 68.2% increase in provision costs. In 2011, BCR posted net profit of RON71 million.
Groupwide, Erste expects stable operating result in 2013 as a slightly lower operating income year-on-year will likely be offset by reduced costs.
Treichl said non-performing loans in Romania have improved in the fourth quarter of 2012 and are expected to continue their positive trend into 2013.
“As a result of that development that we see continuing we will see a very substantial reduction of our loan-loss provisioning levels,” Erste’s chief said.
On the other hand, Treichl estimates the Romanian lending market will continue to lag behind economic growth, which is poised to be only modest in 2013.
“I think it’s too early to talk about a turnaround. We see slight positive developments on the lending side, but it’s much too early to talk about a breakthrough,” he said.
Treichl expects economic growth will be strongly supported by infrastructure projects.
“We’re very hopeful that the trend on the infrastructure side is actually turning substantially more positive,” he said. “The commitments have never been as strong as in the last few weeks.”