- Open for business:
- The stock of net customer loans granted by Banca Comerciala Romana (BCR) advanced by 8.5% yoy as of 31 March 2021 supported by both retail and corporate segments
- New loans in local currency of RON 2 billion granted in Q1 2021 for households (mortgage and unsecured consumer) and micro-businesses
- 1 in 5 Romanians who purchased a mortgage chose BCR
- New approved corporate loans exceed RON 1 billion, of which 47% investment loans
- Support for entrepreneurs, stock of financing for SME segment up by 17.6% yoy as of 31 March 2021
- Support for customers in the current context:
- Over 900 companies that create 80,000 jobs were supported in Q1 2021 through new loans and credit extensions
- Over 1,818 loans in total amount of RON 1.3 billion approved within the SME Invest program
- Accelerated digitization:
- 8 million users for internet and mobile banking, out of which over 1.1 million active users in George, up by 37% as compared to Q1 2020
- Video and digital client financial assistance for thousands of individuals, a complementary service to the one that ensures opening George accounts
- The number of transactions in George increased by 70% in Q1 2021 compared to Q1 2020
- BCR achieved a net profit of RON 424.6 million (EUR 87 million) in Q1 2021
“In a time of accelerated change, the most important thing is how we interact with the public. We understand the necessity of people to be able to make informed decisions for a better life, and we act as advisors for intelligent financial choices, through all possible means: online, video, social media and branches. I thank our colleagues for their flexibility and creativity in helping our customers advance on this journey.
Clients are looking for accessibility, speed and convenience, and we are grateful to them for challenging us to become better and more efficient. In our team we aim to generate practical solutions for our clients, and digitalisation contributes greatly to this. We create intuitive processes through agile digital labs and through the development of the George evolutionary ecosystem, both for individuals and companies.
The growing interest of companies in doing investments, which accounted for half of the new financing we granted this past quarter, gives us confidence that this pandemic is a test of the maturity that the economy will pass effectively“, said Sergiu Manea, CEO Banca Comercială Română.
Measures taken in the context of Covid-19
- According to GEO 227/30.12.2020, clients were able to submit only between 15th of February and 5th of March 2021 their requests for new deferrals of ongoing loans for a maximum of 9 months, this period including also any defferals from which they benefited during 2020. On this basis, on March 31, BCR registered loan volumes that still benefit from certain deferred payments of 0.5% for retail loans, respectively 2% for corporate loans.
- BCR is the only bank to offer 100% online solution for deferring instalments, with 60% of all applications being made through George.
- 40% of the personal loans were granted in Q1 2021 on a fully digital flow, up by 30% as compared to the similar period of last year.
- BCR introduced this year a new way of customers interaction, by creating online mobile offices that provide video consultancy, a complementary service to the one that launches George accounts. Since the beginning of the year, hundreds of customers attended one-to-one meetings where they received tailored solutions for their needs.
Accelerated digitalization for intelligent financial choices
- George offers most retail banking specific products online (current accounts, savings, loans and insurance). Launched on the George ecosystem in 2020 as unique products in the banking market, 48% of all credit cards and 61% of all overdraft products were granted through digital channels.
- BCR consolidated in an intuitive platform the financial profile of the clients in order to be able to serve them better. Through this, bank advisors can offer solutions for taking intelligent financial decisions, and thousands of clients were helped in this way in Q1 2021.
- Over 22.4 million transactions with digital payments in public transport were registered in the past three years, of which approximately 2 million only in March 2021. BCR implemented the contactless payment solution in 16 cities in Romania.
BCR impact in the economy
In retail banking business, BCR generated total new loans in local currency to individuals and micro businesses of RON 2 billion in Q1 2021. Mortgage new sales in local currency increased by 17% yoy, mainly driven by Casa Mea mortgage product which represents 66% of the total production. Also, BCR continued to support the state guaranteed product Noua Casa, the funds allocated to the bank representing 30% of the total guarantees provided by the Romanian Government for this program. New volumes for cash loans sales declined by 9.5% yoy as compared to similar period of last year, when the first three months were not impacted by the pandemic, while overdraft and credit cards increased by 3.6% yoy. Stock of mortgage in local currency increased by 19.5% yoy in Q1 2021, while the stock of consumer loans increased by 5.1% yoy.
In corporate banking business, BCR (bank standalone) approved new corporate loans of RON 1 billion in Q1 2021, of which 47% investment loans. The main driver was the advance of stock of financing granted to SME segment (including BCR Leasing subsidiary) which increased by 17.6% yoy to RON 7.3 billion (EUR 1.5 billion) as of 31 March 2021, as a result of a high focus on new business and advance in leasing and BCR’s participation in SME Invest program. Also, the financing of Public Sector increased by 17.7% yoy, of Real Estate by 6.1% yoy and of Large Corporate by 2.4% yoy.
Q1 2021 financial highlights
BCR achieved a net profit of RON 424.6 million (EUR 87.0 million) in Q1 2021, slightly down by 0.9% against RON 428.3 million (EUR 89.3 million) in Q1 2020, on the background of lower credit risk provision releases, while the operating performance improved underpinned by continued strong loan growth.
Operating result improved by 10.7% to RON 487.1 million (EUR 99.8 million) in Q1 2021 from to RON 440.1 million (EUR 91.7 million) in Q1 2020, on the back of higher operating income along with lower operating expenses.
Net interest income slightly declined by 0.7% to RON 593.8 million (EUR 121.7 million) in Q1 2021, from RON 597.9 million (EUR 124.6 million) in Q1 2020, driven by lower market rates, partly compensated by higher loan and deposit volumes in both retail and corporate.
Net fee and commission income increased by 11.5%, to RON 182.6 million (EUR 37.4 million) in Q1 2021, from RON 163.7 million (EUR 34.1 million) in Q1 2020, due to a larger number of transactions.
Net trading result increased by 24.1%, to RON 79.9 million (EUR 16.4 million) in Q1 2021, from RON 64.4 million (EUR 13.4 million) in Q1 2020, mainly driven by higher trading activity.
Operating income increased by 3.6%, to RON 882.9 million (EUR 180.9 million) in Q1 2021, from RON 852.0 million (EUR 177.6 million) in Q1 2020, driven by higher net fee income and better net trading result.
General administrative expenses reached RON 395.8 million (EUR 81.1 million) in Q1 2021, down by 3.9% in comparison to RON 411.9 million (EUR 85.9 million) in Q1 2020, mainly due to positive impact from the deconsolidation of CIT One subsidiary as well as slightly lower contribution to deposit insurance fund in 2021.
As such, cost-income ratio improved to 44.8% in Q1 2021, versus 48.3% in Q1 2020.
Risk costs and Asset Quality
Impairment result from financial instruments recorded a release of RON 34.7 million (EUR 7.1 million) in Q1 2021, as compared to a release of RON 212.3 million (EUR 44.3 million) in Q1 2020. This result has been positively impacted by cash recoveries in both retail and corporate segments, correlated with very low new NPL formation particularly in the corporate segment.
NPL ratio remained fairly stable at 4.4% as of March 2021 against 4.5% recorded as of December 2020. This evolution is reflecting the positive trend in loans to customers and the slight reduction in NPL stock due to recoveries achieved on both retail and corporate segments. At the same time, the NPL provisioning coverage stood at 122.3% as of March 2021.
Capital position and funding
Solvency ratio for BCR Bank standalone, according to the capital requirements regulations (CRR) stood at 20.4% as of February 2021, well above the regulatory requirements of the National Bank of Romania. Furthermore, the Tier 1+2 capital ratio of 19.4% (BCR Group, before 2020 profit capitalization) as of December 2020 is clearly reflecting BCR’s strong capital and funding positions.
Loans and advances to customers increased by 2.5% to RON 44,062.4 million (EUR 8,951.6 million) as of 31 March 2021 from RON 43,002.5 million (EUR 8,833.2 million) as of 31 December 2020, supported by increases in both retail (+1.2% ytd) and corporate (+5.0% ytd).
Deposits from customers increased by 1.6% to RON 65,903.6 million (EUR 13,388.8 million) as of 31 March 2021 versus RON 64,876.8 million (EUR 13,326.4 million) as of 31 December 2020, supported by increase in retail (+1.3% ytd), while corporate deposits stayed flat versus 31 December 2020.