The bank expects to recognize significant provisions for credit losses and litigation liabilities that will affect the financial result of the Q4 2019.
Hrvatska Poštanska Banka (HPB) published a document on the Zagreb Stock Exchange announcing that they expect to recognize significant provisions for credit losses and litigation liabilities that will affect the financial result of the Q4 2019. According to the company’s preliminary estimates, the total amount of these provisions will be between HRK 95 and 105m for the Q4 2019. The mentioned amount of provisions mainly relates to the provisions for litigation liabilities. The residual amount of the provision relates to credit losses recognized in accordance with IFRS 9.
The company adds that despite previously mentioned losses, the result recorded in 2019 will continue to be profitable, with a significant improvement in operating income and operating profit compared to 2018, and a growing market share. Also, the bank added that the stated provisions will not have an impact on the Bank’s capitalization.
The market reacted to such news yesterday, which resulted in a share price decrease of 3.76%, with it closing at HRK 640 per share. The mentioned share price implies a P/B of 0.53.