BCR recovers and returns to profit – EUR 77 M in Q1

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Banca Comerciala Romana (BCR) posted an operating result of RON 392.3 million (EUR 88.1 million), in Q1 2015, 29 percent lower than the previous year of RON 552.5 (EUR 122.7), a press release informs, driven by weaker operating income, impacted by reduced unwinding contribution and partly compensated by lower costs.

However, in the same period, net profit stood at RON 344 million (EUR 77.1 million), supported by substantially lower risk costs, as a result of better portfolio quality after extensive loan book screening in 2014.

„Q1 2015 financial results point out BCR’s recovery gains strong momentum. We are coming out of a difficult period; (…)As we progress in delivering against our efficiency and risk elimination objectives, we are dedicating increased focus to the build-up of the commercial franchise, underpinned by transparency, stability and simplicity in all our customer relationships,” Tomas Spurny, CEO of BCR said.

In bank retail business, strong performance in volume generation by the franchise resulted in standard mortgages new volumes increasing by 48 percent annually and Prima Casa new production up by 43 percent, respectively.

BCR already commands significant market share in retail business and the quality of corporate assets is improving continuously. Further to that, we are committed to channelling as much as possible of our exceptional liquidity and capital resources towards financing the real economy. (…)” BCR official also said.

The retail performing loans balance stood at around RON 16.6 billion, on the back of new lending matching volumes of loans reimbursed or maturing. At RON 9.55 billion the total performing housing loans portfolio continued to grow versus RON 8.45 billion at end of year 2014. Overall, performing local currency loans portfolio encouragingly grew to RON 7 billion as compared to RON 6.7 billion at year end 2014.

In bank corporate business, performing loan portfolio stood at around RON 11.5 billion, with new approved loans picking up, supported by a solid pipeline of better quality new business, particularly in overdraft, working capital and supply chain financing. That new funding into the economy was coupled with successful distribution of subsidiary products including Erste Asset Management funds, BCR Banca pentru Locuinte and BCR Pensii.

Net interest income, was down by 20.8 percent, to RON 510.5 million (EUR 114.7 million), from RON 644.4 million (EUR 143.1 million) in Q1 2014, on the back of accelerated NPL portfolio resolution, efforts to price competitively in the market, in a context of continuous shift in new retail loans towards secured production and a lower interest rate environment. NPL ratio at 25.6 percent, as of 31 March 2015, significantly decreased versus 30.3 percent as of 31 March 2014, despite overall reduction of the loan book, determined by recoveries, sales of selected NPL portfolios and write-offs. NPL coverage ratio stood at 75.7 percent, significantly above 62.2 percent as of March 2014.

Solvency ratio under local standards (BCR standalone) as of February 2015 stood at 19.7 percent, well above the regulatory requirements of the National Bank of Romania (min 10 percent).

 

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