BCR Group grows operating result but sees falling net profit

BCR Group posted an operating result 32.1 percent higher last year than in 2008, at EUR 772 million, based on continued revenue generation and appropriate cost control, the group has announced.

However, its net profit after taxes and minority interests amounted to EUR 206.3 million, down by around 43 percent on 2008, mainly on much higher provision expense and lower fee income due to lower eligible consumer demand for loans.

The group’s cost-income ratio significantly improved to 34.4 percent from 41.4 percent in the financial year 2008. Return on equity fell to 13.5 percent as expected in an extremely difficult economic environment strongly impacting BCR’s customers. The BCR bank only registered almost a 0.5 percent market share gain on overall lending taking it to over 22 percent, driven by corporate loan growth. Retail lending was slowed by the sharp decrease in eligible loan demand. The lender said it has a strong position in liquidity and a capital base benefiting from the support of its parent bank Erste Group. On the liabilities side BCR’s overall market share remained at over 20 percent based on an appropriate pricing policy and on the strength of the BCR brand. The retail business is self-funding, with its loan-to-deposits ratio standing at around 85 percent.

“In 2009 we worked well to raise our operating profit by 32 percent. Because of increased provisions our shareholders didn’t benefit from the same improvement due to extremely difficult market conditions,” said Dominic Bruynseels, CEO of BCR.

At the international level, Erste Group posted an operating result of EUR 3,771.4 million in 2009, up 25.8 percent on the previous year.

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