BCR’s net profit, up by almost 30 pc in Q3

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Banca Comerciala Romana (BCR) achieved a net profit of RON 1,145.4 million (EUR 255.4 million) in the first nine months of this year, up by 26.7 percent year-on-year, supported by new client business and continued improvement of portfolio quality, a press release informs on Monday.

The operating result stood at RON 1,067.9 million (EUR 238.1 million), 11.1 percent lower than the previous year at RON 1,201.2 (EUR 270.5), driven by lower operating income, impacted by reduced unwinding contribution, low margin and low interest rate environment.

“We are concerned by several legislative challenges in the banking sector and are genuinely worried to see a trend which prevents efficient and sustainable channelling of critical financial resources into infrastructure, education, technology or quality of life, which are obvious priorities for Romania, Sergiu Manea, CEO of BCR, stressed.

In bank retail business, strong performance in volume generation by the franchise resulted in new loans totalling RON 3.8 bn, with solid sales of both unsecured and secured loans – driven by First House program, due to supplementation of available ceiling, presently already exhausted.

BCR successfully targets client activation by means of internet & mobile banking services (up by 30 percent, 150 percent yoy, respectively), free base current account and debit card, as well as ATM and POS transactions (up by 20 percent yoy).

The bank was the first local institution compliant with EU Directive 17 on consumer credit. The bank has also reached a milestone 200.000 clients to whom it has offered in the last years commercial solutions to reduce financial burden and increase loyalty.

In bank corporate business, new volumes added on the balance sheet totalled RON 2.2 billion. Co-financing of EU funded projects was also solid with BCR holding over 30 percent market share and a portfolio of over RON 7.1 bn co-financed. The corporate book growth is supported by a solid pipeline of better quality new business, particularly in overdraft, working capital and supply chain financing.

The same release reads that the net interest income was down by 10 percent, to RON 1,356.3 million (EUR 302.4 million), from RON 1,506.5 million (EUR 339.3 million) in the first nine months of 2015, on the back of continued NPL portfolio resolution, efforts to price competitively in the market and a low interest rate environment.

The operating income decreased by 5.3 percent to RON 2,184.0 million (EUR 487 million) from RON 2,307.3 million (EUR 519.6 million) at end-September 2015, mainly driven by reduced net interest income partly compensated by better net fee and commission income and higher trading result. NPL ratio at 13.3 percent, as of 30 September 2016, significantly decreased versus 22.2 percent as of 30 September 2015, despite overall reduction of the loan book, determined by recoveries, sales of selected NPL portfolios and write-offs. NPL provision coverage ratio stood at 79.7 percent, while, collateral included, it comfortably stood at 113 percent.

Solvency ratio under local standards (BCR standalone) as of August 2016 stood at 22.9 percent, well above the regulatory requirements of the National Bank of Romania (BNR).

Deposits from customers grew by 4.6 percent to RON 44.606.2 million (EUR 10,015.5 million) at 30 September 2016, versus RON 42,626.0 million (EUR 9,422.2 million) at 31 December 2015, driven by retail and corporate deposits.

BCR plans to keep focus on RON lending, so as to reverse the currency mix of the loan book in favour of local currency on medium to long term and fully use the strong self-funding capacity in RON.

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