The net profit for the first half of 2011 amounted to RON158.2 million (EUR37.8 million), which is about one third of the same period a year ago, “mainly on lower net operating income and still high provisioning,” the bank said in a statement.
BCR, the Romanian unit of Austria’s Erste Bank, said the net operating income picked up slightly in quarterly terms (+0.8% in Q2 on Q1 2011) to RON1.06 billion in April-June. The minor increase was due to the growth in net trading which offset the decline in net interest and fee income caused by the decrease in interest rates and its knock on effect on interest income.
However, the operating income for the first half fell 13% on the year to RON2.12 billion, in the context of a continuous decline of the net interest margin, still low eligible demand and increasing competition for quality business, BCR said.
In the second quarter, the net charge with risk provisions totaled RON488.5 million, up 6.8% on the quarter, but down 5.75% from the same period of 2010, pointing to a slowdown in formation of non-performing loans.
Therefore, the risk costs decreased by almost 3% from the first half of 2010, BCR said.
“The domestic and international economic environment remains tough impacting our clients and therefore BCR. Credit demand remains low as the economic recovery is gradual”, said Dominic Bruynseels, the bank’s chief executive officer. “Against this background BCR’s operating performance continued to improve in the second quarter as we did since September last year.”
BCR’s operating profit rose 5.5% quarter-on-quarter to RON642.3 million in April to June, as a result of the operating income marginal growth combined with a drop in operating expenses. However, the operating result for the first half fell to RON1.25 billion, from RON1.6 billion the similar period of 2010, mainly on lower operating income.
The financial data are un-audited, consolidated business results of Banca Comerciala Romana (BCR) Group and computed according to IFRS.