According to non-audited and unconsolidated results, Slovakia's second largest bank - Všeobecná Úverová Banka (VÚB) - reported a loss of 2.98 billion Slovak crowns in the first nine months of 1999. During the same period in 1998 it reported a balanced economic result, although it ended the year 3.998 billion crowns in the red due to the creation of provisions and reserves against classified loans.
The bank's total assets went down 13% from December, 1998 to 154.9 billion crowns. Coverage of assets by primary sources grew from 69% at the end of June to 70% in late September. The bank managed to reduce its dependence on interbank financing, which is a traditional weakness of VÚB. Its debts towards other banks dropped 38% from the same period last year to 25.6 billion crowns at the end of September.
Nine months into 1999, the bank's provisions against bad loans amounted to 2.6 billion crowns. In 1998, VÚB followed the advice of auditors and created 9.026 billion crowns in provisions and reserves for the coverage of losses from classified loans. According to the report of VÚB's auditor, Deloitte & Touche, the bank needed provisions and reserves of 19.820 billion crowns at the end of 1998.
Approximately 40 billion crowns of VÚB's loans were non-performing and brought in no interest yield at the end of last year. In 1998, the quality of the bank's loan portfolio deteriorated significantly compared with previous years, with more than 50 billion crowns, or over half of total loans, being classified.