In 2010, BCR, in which Erste owns almost 90%, reported net profit of RON467 million.
The bank’s operating profit amounted to RON2.44 billion, 14.6% from RON2.85 billion in 2010, mainly on a drop in operating income. The net operating income went down by 8.7% year-on-year to RON4.13 billion, as a result of the decrease in interest rates and the interest margin compression impacting interest income (down by 10.9% or RON754.5 million), the bank said.
However, net fee income rose 24.9% to RON580.1 million, driven by the positive result in lending business. The bottom line was also helped by a 35.8% higher net trading result, at RON422.4 million, fueled by foreign exchange trading.
“2011 was a difficult year as the economic recovery was slowing in the second half, beyond expectations. This is affecting the business and income of our customers and therefore had a negative impact on their transactions with BCR”, said Dominic Bruynseels, BCR’s chief executive officer.
The net charge with risk provisions for loans and advances totaled RON2.15 billion, 7.9% higher than RON2 billion in 2010, reflecting the impact on customers of delayed economic recovery, the bank said. “NPL remain manageable, weighting 20.6% of the total loan portfolio at end December 2011,” it added.
BCR also said the operating costs were slightly up at RON1.7 billion. As a result, the pretax profit amounted to RON119.6 million, down from RON641.9 million in 2010, “mainly on lower net operating income and high provisioning in corporate lending which could not be offset by the increase of the net fee income and trading result.”
In the fourth quarter alone, the bank returned to profit, with a net result of RON2 million, from a loss of RON89.8 million in the third quarter, following a lower net charge with provisioning.
Solvency ratios remain above the required levels. At the end of December, the tier 1+2 capital ratio was 12.7%, when computed according to the Romanian accounting standards, against 10% the minimum requirement of the central bank. According to the international standards IFRS, the solvency ratio stood at 17.1%.
Cost to income ratio increased to 41% at the end of December, from 36.9% in the year-earlier period, impacted by a more limited income generation.
BCR’s total assets posted a 4.3% increase to RON76.75 billion, so that the bank strengthened its leading position in the Romanian market, with a share above 20%.
BCR’s loan book continued to grow, despite a weak eligible credit demand, due to a good performance mainly in corporate lending. The loan portfolio stood at RON53.37 billion at the end of last year, from RON52.24 billion in the same period of 2010.
Deposits from customers rose by around 4.9% on the year to RON39.67 billion. (EUR1=4.348)