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KBC's Hungarian profit falls in 2013
February 17, 2014 / 2:26 PM / 4 years ago

KBC's Hungarian profit falls in 2013

BUDAPEST, Feb 17 (Reuters) - The Hungarian unit of Belgian KBC reported a 15.2 percent fall in 2013 after-tax profit on Monday, dragged down by a rise in non-performing loans and a reassessment of its loan book on the basis of new European Banking Authority guidelines.

K&H Group said its after-tax profit for the year fell to 17.4 billion forints ($77.03 million) from 20.5 billion in 2012 as its fourth-quarter profit plunged to nearly a fifth of the level a year earlier, just 1.2 billion forints.

“That result was dramatically impacted by the higher amount of credit provisions that we booked in the fourth quarter to cope with the increase in non-performing loans and to adjust to the new definitions ... by the EBA,” K&H Chief Executive Hendrik Scheerlinck told a news conference.

K&H said provisions jumped to 12.9 billion forints in the fourth quarter from just 2.1 billion in the same period a year earlier. The stock of non-performing loans rose to 12.9 percent by the end of the fourth quarter from 12 percent a year ago.

Even so, K&H has remained one of the few profitable banks in Hungary, where lenders have been hit by Europe’s highest bank levy and other measures imposed by the government, as well as seeing their loan books deteriorate.

Austrian Raiffeisen has recently lifted capital in its Hungarian business, as did German Bayern LB in its local unit called MKB Bank. ($1 = 225.89 Hungarian forints) (Reporting by Gergely Szakacs; Editing by Catherine Evans)

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