BRD Q1 2021 results in Romania: Net profit of RON 222 million

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The main commercial trends and financial indicators of BRD Groupe Société Générale at March 31,
2021 at consolidated level, according to the International Financial Reporting Standards (IFRS):
– Dynamic activity:
1. steep increase in retail loan production, +9% YoY
2. strong corporate financing activity (+7.8% YoY), driven by a sustained advance on
SMEs (+25% YoY)
3. granting the largest green loan so far in Romania, materializing the ambition to actively
develop sustainable and positive impact financing
4. 53% market share in the third governmental bond issue for individuals, within Fidelis
program
5. growing adoption of digital channels, with MyBRD Mobile & MyBRD Net unique active
users up by +22% YoY
– Resilient revenues despite lower interest rate environment, RON 759 million net banking
income in Q1 2021 (vs. RON 767 million in Q1 2020)
– Strong cost discipline, without compromising on investments in strategic digital roadmap
– Low NPL ratio, Net cost of risk at 55 bps
– Net profit of RON 222 million (vs. RON 241 million in Q1 2020)
The Romanian economy performed above expectations in the fourth quarter of 2020, driving the annual
GDP to a less pronounced decrease than initially estimated.
On the sanitary front, the vaccination campaign is progressing, laying out the premises for a controlled
health situation. If the direct effects of the pandemic diminish and, at the same time, a smooth transition
to neutralized support measures is ensured, 2021 is likely to be a better year for the Romanian economy.
Despite the restrictive measures still in place to contain a third wave of the pandemic, BRD had a strong
start of the year.
The individuals’ loan production was significantly up and corporate lending was fueled by very dynamic
SME financing. We also granted the largest green loan in Romania to date, a testament to our ambition
to contribute to the development of a more sustainable world.

In parallel, digital adoption continued to accelerate, with a +22% yearly increase in the number of
customers actively using remote channels.
As such, BRD delivered in the first three months of the year a performance proving the adaptability of
its business model and the adequacy of the actions taken in response to the crisis. The NBI was resilient
despite significantly decreasing market interest rates, while costs were strictly controlled without
compromising on strategic investments.
With its strong fundamentals, BRD is in full capacity to continue to support its customers and the
recovery of the Romanian economy”, said François Bloch, CEO of BRD Groupe Société Générale.
Dynamic commercial activity
The individuals’ loans production was up by +9% YoY, building on both consumer loans’ steep increase
(+19%) and new housing loans outside governmental programs (as Noua Casa envelope remained
unavailable until quarter end). Corporate loan portfolio advanced by a robust +7.8% versus March 2020
end, driven by a very dynamic SME financing activity (+19.4% YoY, including leasing). Materializing its
expertise and strong commitment for sustainable and positive impact financing, BRD structured the
most important green loan granted so far in Romania, worth RON 1.25 billion.
Retail deposits’ annual growth reached +10.1% YoY, still benefiting from the strong savings’ propensity
triggered by the prolonged pandemic. Corporate deposits solidly advanced (+ 8.1% YoY), mainly on a
double digit increase of SMEs resources (+11.2% YoY). In parallel, a strong recovery pace is visible in
asset management activity, with assets under management reaching RON 4.61 billion at March 2021
end, increasing by 27% YoY and driving the market share to 19.4%* (+1.5 ppts y/y). Moreover, BRD
intermediated 53% of the third Romanian government bond issuance for individuals under Fidelis
program.
The accelerated digital adoption is reflected by the strongly increasing number of internet and mobile
banking unique active users (to 763k at March 2021 end, up by +22% YoY), and the fast growing number
of transactions via electronic channels, +45% YoY in Q1 2021. Digital penetration on corporate clients’
segment reached a very high level, with 99% of large corporate and 96% of SMEs transactions
performed via digital channels.
Resilient financial performance
BRD Group net banking income printed at RON 759 million in Q1 2021, quasi-stable compared to Q1
2020 level (-1.0% YoY from RON 767 million in Q1 2020). Net interest income decreased by 7.4% YoY
in Q1 2021, impacted by the lower market rates in the first quarter of the year (average ROBOR 3M in
Q1 2021 at 1.65% vs. 3.03% in Q1 2020).
The pressure on net interest income was compensated by a better performance of net fees and
commissions and other banking revenues. Net fees and commissions registered a +1.3% YoY advance
compared to Q1 2020, supported by a higher contribution from capital market activities and increased
transactional activity. The normalization of the market context (as compared to the very adverse one in
March 2020) translated into improved trading revenues and positive revaluation effects, positively
influencing the evolution of other income.
Operating expenses totaled RON 438 million in Q1 2021, +1.9% excluding the higher contribution to
Deposit Guarantee and Resolution Fund (RON 49.4 million, recognized in full in Q1 2021, compared to
RON 43.3 million in 2020). Staff expenses were reduced by -5.1% YoY in Q1 2021, as a result of
increased automation and productivity gains. Non staff expenses were driven by the acceleration of
investments in digital transformation and the extraordinary sanitary costs, while other expenditures
remained under strict control.
The quality of the loan book remained solid in Q1 2021, as reflected by the low NPL ratio (Bank level,
non-performing loans, according to EBA definition), reaching 3.3% at March 2021 end, stable compared
to March 2020 end. The net cost of risk reached 55 bps in Q1 2021, mainly relating to retail portfolios, while the NPL provision coverage was maintained at a high level (73.3%, at March 2021 end, at Bank
level).
Embedding all the above, BRD Group net profit reached RON 222 million in Q1 2021 vs. RON 241
million in Q1 2020. Return on equity stood at a high single digit level (9% in Q1 2021 end vs 11.8% in
Q1 2020 end, the decrease being largely triggered by the higher capital base).
The solvency ratio is elevated, reaching 31.6% at March 31, 2021 (BRD standalone), compared to
22.6% at March 31, 2020, as a result of incorporation of 2020 profit (net of dividends according to GSM
resolution, strongly limited this year in compliance with the strict regulatory restriction), increased
reserves from revaluation of debt instruments and decrease of capital requirements mainly driven by
the temporary risk weight relief for sovereign debt issued in the currency of another Member State
(implemented through Regulation EU 2020/873 as regards certain adjustments in response to the
COVID-19 pandemic).

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