BRD profit decreased 7 percent to RON 465 mln on 2011

The net profit of BRD-Groupe Societe Generale fell 7 percent y/y to RON 465 million (EUR 110 million) in 2011, on Romanian accounting standards, while banking income also lost 9 percent y/y to RON 3.2 billion, due to a reduction of interest rates, triggered by ROBOR contraction on H1 2011.    

BRD, which is the second bank in Romania with assets of EUR 11.2 billion, saw its retail lending gain 1.1 percent y/y to RON 33.5 million, fueled by mortgage scheme “Prima Casa” and a loan refinancing campaign, while deposits increased by 0.9 percent to RON 30.2 billion at end-2011, equally shared by corporate and retail segments. The loan to deposit ratio stood at 111 percent, below the 116 percent average of the banking system.

The lender’s operational expenses slightly decreased to RON 1.3 billion last year, as personnel expenses were cut by 5 percent. The cost to income ratio stood at 43 percent last year, below the banking system’s average of 68 percent. BRD’s network remained stable at 937 units, and the personnel was reduced to 8,245.

Net risk cost decreased to 370 basis points last year, although provisioning for doubtful loans and losses increased to 60 percent. Non-performing loans ratio stood at 12.2 percent in 2011, below the system’s average of 14.1 percent.  

BRD remains well capitalized at RON 5.1 billion, with return on equity closed to 10 percent. The bank’s solvency rate was 14.7 percent last year, slightly above the system’s average of 14.5 percent.  

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