“In a difficult market environment, Volksbank Romania ended the first quarter with significantly better results than expected. Primarily a greater loss was expected,” Volksbank Austria said.
It said the better result was due to a greater-than-expected reduction in non-performing loans, which translated into lower risk provisions.
The Austrian lender forecasts Volksbank Romania will end 2012 with a loss of EUR10 million.
End-March, Volksbank Romania reported operating profit before provisions of EUR15.6 million, the local bank told Mediafax reporters.
The bank booked provisions worth EUR23.4 million in January through March.
“Volksbank Romania posted a pretax loss of EUR7.8 million in the first quarter, almost 20% narrower on the year. Even with the loss, Volksbank’s solvency ratio remains close to 20%, one of the best ratios in the system,” the bank said.
Founded in 2000, Volksbank Romania last year was transferred to a special vehicle majority-owned by Austrian Volksbank, after the latter sold its eastern European arm to Russia’s Sberbank.
The Romanian unit was not part of the deal. However, the mother bank said it plans to sell Volksbank Romania, following a reorganization plan that would take two to three years.