Kredyt Bank feels the pressure from a depressed market

Kredyt Bank (KB) is likely to suffer a zl. 200 million net loss this year. Quoting the bank's CEO, Stanislaw Pacuk, Rzeczpospolita reported that the bank had earlier expected to earn nearly zl. 40 million, but extra provisions for risky loans would push it into the red for the first time in years. On Friday, KB, a unit of Belgian bank and insurance group KBC, said it had created nearly zl. 300 million of new provisions in the July-September period as Poland's economic slowdown deteriorated its assets quality. In the first half of 2002, KB's net provisioning stood at zl. 135 million with a profit of zl. 3 million. The bank said more money had to be put aside to cover its loan exposure to individual clients as well as corporate customers, which include the shipbuilding and construction sectors. Lower demand for loans has not helped the situation. KBC said it would grant the bank a subordinated loan of euro 110 million to strengthen its capital base. (Reuters)