BCR posted a net loss of 307.8 million lei (EUR70.8 million) for the first quarter, compared with a net profit of RON76.1 million in the same period a year ago.
The net charge with risk provisions for loans rose to RON933.7 million, from RON457.4 million in the first quarter of 2011, the bank said in a statement. It said non-performing loans weigh 22.4% of the total loan portfolio, and that the increase in provisioning led to an improved NPL coverage ratio (52.2% versus 50.1% at year-end 2011) and “reflects the impact of the weak performance of the Romanian economy on BCR’s corporate customers.”
Previously, the bank had reported quarterly losses in the fourth quarter of 2010 (RON29.5 million), and in the third quarter of 2011 (RON90.5 million).
The bank’s operating profit stood at RON610 million in January to March, almost unchanged year-on-year, as an increase in net trading result and lower costs combined to offset a drop in net operating income.
The operating income was down 2.5% on the year to RON 1.03 billion, mainly due to the interest margin compression, weak credit demand and increasing competitive pressure that impacted interest income (which fell 7.6% on the year to RON 750.4 million). Net fee income increased 1% to RON 155.6 million. The net trading result nearly tripled to RON122.9 million, driven primarily by foreign exchange trading.
Operating expenses fell 6.1% on the year to RON418.9 million.
“Prudent cost and risk management leads the bank in a strong position to achieve sustainable results in the future,” said Helmuth Karl Hintringer, BCR Chief Financial Officer.
BCR said its solvency ratios remain well above the required levels, as the Tier 1+2 capital ratio stood at 12.31% in February.
The cost to income ratio improved to 40.7% as of end March 2012, from 42.3% in the year-earlier period.
BCR Group’s total assets were at RON75.5 billion at the end of March, down 1.6% on the year. The loan portfolio amounted to RON53.9 billion, almost 1% higher than in December 2011, while the total deposits were stable at RON39.6 billion.
The BCR Group includes, among others, BCR, BCR Banca penrtu Locuinte, BCR Administrare Fond de Pensii, BCR Leasing, BCR Asset Management, BCR Securities, Anglo Romanian Bank Limited and BCR Chisinau.
The results are unaudited and compiled according to the International Financial Reporting Standards.