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Croatia's HPB to book 105 mln kuna (14 mln euro) of provisions in Q4 2019

Author Iskra Pavlova
Croatia's HPB to book 105 mln kuna (14 mln euro) of provisions in Q4 2019 Photo: Hrvatska Postanska Banka (HPB)

ZAGREB (Croatia), January 14 (SeeNews) - Croatian state-controlled lender Hrvatska Postanska Banka (HPB) [ZSE:HPB] said on Tuesday it expects to book provisions of up to 105 million kuna ($16 million/14 million euro) for credit loss and litigation liabilities in the final quarter of 2019.

The estimated amount is preliminary and will have a negative effect on the lender's financial result of the fourth quarter of last year, HPB said in a statement with the Zagreb Stock Exchange (ZSE).

The provisions mainly relate to the provisions for litigation liabilities in accordance with Croatian central bank's by-laws prescribing the treatment of these provisions and International Accounting Standard 37 provisions, contingent liabilities and contingent assets, according to the estimated probability of disputes and outflows, HPB said.

"The residual amount of the provision relates to credit losses recognized in accordance with International Financial Reporting Standard 9 Financial Instruments," the statement said.

Still, HPB's overall financial result for 2019 will remain positive, with significantly higher operating income and operating profit compared to 2018, the bank said without providing figures.

It added that its market share also increased last year.

The provisions will not impact HPB's capitalisation, the bank said.

HPB was Croatia's sixth largest bank by assets at the end of September, according to the latest central bank data available.

The lender said earlier that its non-consolidated net profit rose by 38.1% on the year to 170.4 million kuna in the first nine months of 2019.

HPB's share price fell 4.51% to 635 kuna at the opening of the Zagreb bourse on Tuesday, after closing 1.53% higher on Monday.

(1 euro = 7.44574 kuna)

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