BRD, a unit of the French financial group Societe Generale, posted a net profit of 43.2 million lei (EUR9.7 million) last year, compared to a loss of RON385.8 million in 2013.
The bank managed to reduce its non-performing loans ratio to 20.3% at the end of 2014, from 24.9% a year before, due to the implementation of “an active write off and sale policy, while improving the coverage of NPLs with provisions” (from 69% to 71%), the bank said in a statement. As a result, the net cost of risk declined by 43% against 2013.
Net banking income declined by 8.4% compared to 2013, to almost RON2.5 billion, mainly due to the net interest margin contraction caused by the lower volumes of loans for companies. Loans to individuals, however, rose slightly last year, fueled by the housing loan portfolio, the bank said.
BRD said cost cutting measures led to an overall reduction in operating expenses of 2.9% compared to 2013, so that the cost-to-income ratio stood at 50.2%.
“2014 marked a turning point for BRD, when the bank returned to profit while managing to further improve its risk profile and operational efficiency,” said Philippe Lhotte, BRD Chairman and chief executive officer.
“In 2015, BRD will continue to draw on the strength of its universal banking model and capacity to provide innovative solutions and tailor-made advices to a broad customer base. More than ever, BRD has also the ambition to be positioned at the forefront among the economic actors that will create the premises for a revival in investment activity.”
The bank had total assets of RON45.2 billion at the end of December, down from RON47.1 billion in 2013.
BRD has a capital adequacy ratio of 17% (under Basel III regulations) versus 14.2% in 2013 (Basel II), well above the regulatory requirements.