BCR, a unit of Austria’s Erste Group Bank (EBS.RO), has seen its results in the past years plagued by the large number of non-performing loans. In the first half of 2014, BCR reported a net loss of RON276.6 million, versus profit of RON560.9 million a year ago, due to high provisioning costs.
Loan provisions increased by 29.5% to RON1.3 billion, from RON1 billion at the end of June 2013. The NPL ratio remains at 29.3% of total loan portfolio, despite overall decrease of the loan book caused by natural repayments, write-offs and sales of selected NPL portfolios, BCR said.
“BCR manages a non-performing loans portfolio of around RON12.9 billion, which it decided to resolve in accelerated manner, thus expecting significant improvement of its balance sheet quality (a NPL reduction of about 25%, compared to year-end 2013) and financial performance in the near term,” the bank said.
Aiming to achieve 25% an overall NPL balance reduction until year-end, BCR said consequent risk costs are anticipated to offset the operational result of the bank in 2014.
“In that respect, BCR has signed, in July 2014, a sale transaction of RON1 billion for a non-performing corporate loans package (secured, all of which in legal procedures – insolvency, enforcement), to a consortium of foreign investors and available funding lines,” the bank said.
BCR also reported a decline in total assets by 5.1% to RON63.3 billion at the end of June, from RON66.7 billion at December 31, 2013.