BUDAPEST, March 7 Hungary's OTP Bank
expects its loan portfolio to improve this year and its risk
costs to moderate not counting the bank's Ukrainian and Russian
operations, the bank said in a presentation on Friday.
Risk costs, among other factors, nearly wiped out OTP's
profit in the fourth quarter and led to the bank's lowest profit
in a decade in 2013, OTP reported earlier on Friday.
The bank warned of risks in its home Hungarian market, where
a potential government plan to help foreign currency loan
holders poses a negative risk to the bank's operations.
In Ukraine, where OTP has tied up 9 percent of its loan book
as of the end of last year, an "extreme negative scenario" is
plausible, involving political uncertainty, unmanaged state debt
refinancing, economic contraction and a significantly
depreciating hryvnia currency, the bank said.
(Reporting by Marton Dunai)