The first six months of the year saw the bank post a net profit of RON282 million (EUR66.5 million), down 23% against the first half of last year because of weaker performance in the first part of 2011. The figures are calculated based on Romanian accounting standards.
BRD is the second-largest bank on the Romanian market after BCR in terms of assets (RON47.6 billion at the end of the first half), but is the most profitable, with the entire banking system making a profit of just RON94.5 million in the first half of the year. The assets have basically stayed the same as at the end of 2010, but are 3.1% lower than on June 30 2010.
BRD has, however, remained the most profitable bank in the system, accounting for nearly three quarters of the cumulated profit of the top ten banks on the market, of around RON380 million, with some of them even making losses. In the first half of 2010, the cumulated profit of the top ten banks had amounted to EUR573 million, i.e. more than 50% higher.
“I think during these difficult economic times, BRD has demonstrated in the first half of the year the soundness of the universal bank model and its ability to generate profit,” said Guy Poupet, chief executive of BRD-SocGen.
The low demand for loans continued to affect the bank’s business: the volume of loans for individuals continues to be 5% below the year-ago level, although it climbed slightly in the second quarter, to RON16.05 billion. The volume of corporate loans climbed 1% against the level recorded at the end of 2010, to RON15.14 billion.
However, the bank managed to cut its provision spending by 8% in the first half, to RON581 million.
“Amid the unprecedented international turmoil, which has serious repercussions in the Romanian economy, ‘benefiting’ from a legal framework that often proved too permissive, and faced with excessive behavior from certain clients often enough, our bank has managed once again to prove the viability and consistence of its business model,” commented Sorin Popa, deputy general manager of BRD (executive officer).
He says in order for these times to be weathered, one needs, in addition to keeping macroeconomic balances, to rebuild trust, have more tolerance and common sense, as well as to have a positive, non-biased approach in terms of communication through the media.
(EUR1=RON4.2403)
(English version by Daniela Stoican, edited by Loredana Fratila-Cristescu)