“We expect that BCR (Erste’s local unit in Romania – e.n.) will return to profitability this year. However, as our business model is closely linked to the development of the economy it is too early to give specific guidance until when this will happen,” Treichl told an Internet chat on Erste’s website.
He said BCR’s restructuring program is progressing as expected.
Erste is already seeing the first positive effects of its large programs started in Hungary and Romania, Treichl said.
“In Romania we plan to return to the profit zones this year. In Hungary it will take a bit longer primarily given the high tax burden.”
Erste plans to cut around 800 jobs (or 10% of total) in Romania this year, while most of the efficiency improvement measures in Hungary have already been made, Treichl added.
“All these measures are in the light of the economic situation and the need to make the banks more efficient,” he said.
BCR Group reported a loss of 1.2 billion lei (EUR277 million) in 2012, versus profits a year earlier, hurt by a 68.2% increase in loan loss provisions.