VIENNA (Reuters) - Austria’s Erste Group Bank (ERST.VI) said risk provisions should fall sharply this year at its Romanian unit, which it expects to return to profit after a large writedown.
“Following the peak in risk provisions in 2012, a significant reduction is planned for 2013,” the bank, one of the leading lenders in Europe’s emerging economies, said in its annual report published late on Friday.
Erste added that it had no sovereign or bank exposure to Cyprus, and no payment risk from its 60 million euros ($77 million) in corporate credits, since all the related repayments originated from outside Cyprus.
The Mediterranean country averted bankruptcy with a last-ditch bailout agreement with the European Union this week. Banks there were closed for nearly two weeks to prevent a run and restrictions have been imposed on transactions to avert a flight of capital.
Erste said it had 333 million euros in net exposure to the sovereign in Slovenia - where borrowing costs have soared due to fears it will be the next euro zone country to need a rescue - and 21 million to Slovenian banks as of December 31.
Erste added that it had reduced its exposure to Slovenia by 94 million euros from a year earlier.
Reporting by Georgina Prodhan,editing by G Crosse