The indicators are calculated according to Romanian accounting standards and have been audited.
The volume of loans amounted to RON3.25 billion (net amount), close to the level recorded in 2010, but balance sheet assets continued the adjustment trend of the last few years, falling by around 6%, to RON5.8 billion (EUR1.3 billion). Under the circumstances, the return on assets was 1.68%, which compares with an average of 0.1% at market level.
“We are very happy with our results for 2011 because we achieved our objectives and we are also happy because we had a positive contribution to the results of the entire banking system, which posted losses overall last year,” says Henk Paardekooper, the Dutchman who at the beginning of the year took over as president of RBS Romania, being authorized by central bank BNR in April.
Around half of the 41 banks on the market posted losses in 2011, with the entire system ending the year with losses equivalent to EUR100 million according to Romanian Accounting Standards, mainly because of the cost of non-performing loans.
But the market returned to growth in 2Q of 2012, with a profit of EUR38 million according to international financial reporting standards. Paardekooper says RBS figures for 2011 are an “exceptional result,” under the circumstances.
Client deposits totaled RON4.53 billion, down 5% on 2010, with the bank failing to get involved in the war of interest rates led by Greek-held banks.
RBS, formerly ABN Amro Romania, is recognized on the market as a specialist in corporate banking, but in the years previous to the crisis it had also built a significant retail portfolio as it sought to attract average and above-average income earners.
In early spring, the head of RBS announced the bank was abandoning this strategy and focusing on its corporate business, where the bank has the best performance. In fact, this is the market segment that has coped the best during the crisis period. This was also reflected by the results of Citibank, another strong bank on the corporate segment, which reported a net profit of RON119 million and ROE of almost 20%. UniCredit, whose plans for significant retail expansion have been put off by the crisis, has also decided to focus on the corporate segment for the time being.
RBS Romania, which up until last year wanted to sell its entire operations, is now seeking a buyer for its retail portfolio, but the market is very weak and the UK bank will not budge on the price. The lack of agreement on the price was one of the main reasons why the sale did not go through, especially given that the bank kept its profitability.
Retail banking is having a tough time recovering because people have become very cautious and are no longer looking to take on debt. Activity is not intense on the corporate banking market, either, the number of new projects is small, but at least banks that have a solid base of major corporate clients earn rather well from services and financing delivered to this segment. (EUR1=RON4.4648)
(English version by Daniela Stoican)