Banca Carpatica reported a net loss of 0.35 million lei (EUR0.08 million) for the first six months, compared with a net profit of RON16.1 million in the same period of 2013.
During the first half of 2014 the bank recognized a gain of RON33.4 million following the sale of part of its financial assets portfolio, compared to RON52.5 million in the same period of 2013, when the value of financial assets sold was double, the bank said in a statement.
“After a re-evaluation of the bank’s repossessed assets, a provision of RON7.2 million has been made during the first half of 2014.” The bottom-line was also impacted by a deferred tax adjustment of RON7.6 million.
“Adjusting for these items the bank recorded a stable financial performance for the first half of 2014,” the statement reads.
It added the bank made significant progress in identifying strategic investors. “Since the second quarter of 2014, mandated by the bank’s shareholders, our priority is now to identify a suitable strategic investor with whom we can maximize our growth potential and to ensure that we create sustainable value for both our customers and our shareholders,” said Johan Gabriels, the bank’s chief executive officer.
The bank expects to end the year with profit, despite the losses in the first half and the portfolio restructuring.
“Despite the fact that our profitability is affected in the short-term by the sustainable provisioning, we expect the bank for the full year 2014 to remain profitable although at a lower level than 2013,” Banca Carpatica said.
The bank reduced its net banking revenues by 7.33% in the first six months of the year, to RON86 million, as a result of lower revenues from financial assets while its net loan portfolio continues to increase and net interest margins are stable.
The operational profit for the first half of 2014 decreased by RON13.6 million compared to the same period for 2013. The bank said the loss of revenues on financial assets where partly offset by a 9% reduction in costs.
The net performing loan portfolio was RON845 million at the end of June 2014, up 4.6% compared to December 2013. However, total assets were down by 19% compared to December 2013, to RON3.3 billion as a result of the reduction in financial assets portfolio.
The volume of the deposits declined by 3% in the first half to RON2.7 billion.
Banca Carpatica has been in the spotlight earlier this year after the central bank suspended the voting rights of two of its largest shareholders, namely Ilie Carabulea and Corneliu Tanase.
Carabulea was placed under house arrest for suspicion of bribery and influence peddling in connection to a case regarding the insurance company Carpatica Asig, part of the Carpatica banking and financial group. Tanase’s voting rights were suspended for having acted together with Carabulea.
Carabulea owns roughly 41.29% in Carpatica. His share could be acquired by the new investors in the bank.