Erste Group Bank, the owner of Česká spořitelna, is expecting to post a record loss of €1.6bn (CZK 44bn) in 2014. The company is blaming the weak performance on problems on the Hungarian and Romanian markets, writes Reuters.
The bank wrote that it expects risk costs will increase from €1.7bn to about €2.4bn this year. Business in Hungary will likely suffer from a new legislative bill that will force banks to cover more losses on foreign exchange loans. Passed last week, the bill will reduce bank charges on foreign currency mortgages, costing banks 600 to 900 billion forints. In Romania, increased risk provisions reflect the central bank’s efforts to speed up reductions on non-performing loans ahead of ECB-led health checks on EU banks’ balance sheets, according to Erste.
