BCR posts EUR 77 mln net profit in Q1

On the back of a RON 392.3 million (EUR 88.4 million) operating result, Banca Comerciala Romana’s (BCR) Q1 2015 net profit stood at RON 344million (EUR 77.1 million), supported by lower risk costs, as result of better portfolio after extensive loan book screening in 2014.

The bank has also made efforts to reduce NPL legacy and improve performing portfolio quality and the results are visible in both retail and corporate business. NPL ratio decreased to 25.6 percent compared to 30.3 percent in Q1 2014, while NPL coverage ratio stands stable at a level of 75.7 percent.

In Q1 this year, BCR recorded an uplift in retail secured loans, with standard mortgage increasing 48 percent annually and Prima Casa new production up by 43 percent annually. Incorporate business, new approved loans were up y-o-y, supported by a solid pipeline of new business.

Expenses were down by 1.3 percent y-o-y, while cost savings are expected to translate into infrastructure investments in the following quarters, also reads a bank’s press release.

BCR’s solvency ratio stood at 19.7 percent in February 2015 at bank level, while Tier 1 + 2 capital at group level was RON 6.2 billion (EUR 1.4 billion), as of December 2014.

In bank retail business, the 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. The retail performing loans balance stood at around RON 16.6 billion (EUR 3.7 billion), on the back of new lending matching volumes of loans reimbursed or maturing. At RON 9.55 billion (EUR 2.1 billion) the total performing housing loans portfolio continued to grow versus RON 8.45 billion (EUR 1.9 billion) at end of year 2014. Overall, performing local currency loans portfolio grew to RON 7 billion (EUR 1.6 billion) as compared to RON 6.7 billion (EUR 1.5 billion) at year end 2014.

In bank corporate business, performing loan portfolio stood at around RON 11.5 billion (EUR 2.6 billion). 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.

Net fee income was down by 4.7 percent, to RON 167.6 million (EUR 37.7 million), from RON 175.9 million (EUR 39.1 million) in Q1 2014, on the back of lower fees from loan management and current accounts.

Net trading result decreased by 29.8 percent, to RON 61.9 million (EUR 13.9 million), from RON 88.3 million (EUR 19.6 million) in Q1 2014 on the back of reduced trading activity.

The operating income decreased by 18 percent to RON 749.9 million (EUR 168.5 million) from RON 915 million (EUR 203.2 million) in Q1 2014, mainly driven by reduced net interest income along with lower trading result.

General administrative expenses in Q1 2015 reached RON 357.6 million (EUR 80.4 million), down by 1.3 percent against RON 362.5 million (EUR 80.5 million) in Q1 2014. Cost-income ratio advanced to 47.7 percent in Q1 2015, versus 39.7 percent in Q1 2014.

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