BRD registers lower profit in Q1 2016 y-o-y

BRD posted net profit amounting to RON 73 million in Q1 2016, a drop from the RON 85 million registered the previous year, according to the group’s financial data.

The gross operating result and the net result were influenced by the booking in the first quarter of the entire annual contributions to the Bank Deposit Guarantee Fund and the Resolution Fund, the bank says.

BRD’s net loans outstanding increased by 1.1 percent since March 31, 2015 due to unsecured consumer and housing loan growth as well as intensified commercial activity on large corporate clients.

Retail clients brought the bank an increased net loan outstanding by, to RON 1.1 billion. New loan volumes came especially from unsecured consumer loans (+23 percent versus Q1 2015) which represented 70 percent of loan production.

BRD also registered positive results online, with the stock of internet and mobile banking contracts increasing by 38 percent to more than 900,000 contracts.

The large clients’ net loan outstanding was up by 8.5 percent versus March 31, 2015, as this segment further delivered strong performance in a context marked both by an improvement of the macroeconomic situation and increased competitive pressures.

The bank’s deposit base expanded both on retail and non-retail segments and was by 6.9 percent higher y-o-y, sustained by deposits on current accounts (+39 percent).

A significant part o these deposits were from individual customers, with the deposit market share on this segment increasing to 13.9 percent, by 0.4 percentage points versus March 31, 2015. Moreover, BRD AM’s assets under management rose by 8.9 percent reaching RON 2.8 billion at March 31, 2016.

The ratio of net loans (including net financial lease receivables) to deposits was 71.3 percent (-4.0 pts versus March 31, 2015).

“The first quarter marked a good start to 2016, illustrating a pronounced improvement in operating performance and dynamic activity on individual and large corporate customers. Going forward, BRD will continue to pursue market opportunities by capitalizing on its universal bank model, in order to further strengthen commercial activity, while ever increasing customer satisfaction,” said Philippe Lhotte, BRD CEO.

The group’s net banking income jumped 3 percent to RON 647 million as compared to the first quarter of the previous year. This was mainly supported by a rise in net interest income (+7.2 percent) thanks both to positive interest rate and volume effects, and higher net fees and commissions (+4.8 percent) due to increased revenues on card activity.

The bank’s cost/income ratio dropped 3 percentage points to 62.5 percent on the back of lower operating costs (down 1,8 percent to RON 405 million).

The NPL ratio also declined, supported by write-off transactions operated by the bank, reaching 16.4 percent at the end of March 2016, from the 20.3 percent posted at the end of the first quarter the previous year.

The coverage of non-performing loans with IFRS provisions increased from 72.8 percent at March 31, 2015 to 81.5 percent at March 31, 2016. Cost of risk was 195 bps compared to 147 bps in Q1 2015, mainly due to some adjustments made to the provisioning of non defaulted exposures.

Natalia Martian

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