BCR, held by Austria’s Erste, remains no. 1 in the system by assets with RON71.2 billion (EUR16.4 billion), but swung to losses last year (RON327 million or EUR75.9 million) according to Romanian accounting standards (RAS).
BRD, held by French group Societe Generale, retains its position as the most profitable bank, reporting a net profit of RON472 million (EUR108.5 million) for last year, while the overall banking sector posted a loss of RON430 million.
Only half the banks reported profit last year, while the other half struggled with losses. Volksbank posted the largest negative result, with a loss of RON635 million (EUR146 million).
The quality of the loan and client portfolio supports the results of a bank. BCR carries a history of the times before its privatization, followed by the strategy and management changes brought by Erste. BRD is making good use of the network it built fast during the boom years and reaping the benefits of better management.
Romanian-controlled Banca Transilvania, is no. 3 in terms of assets and is also no. 3 in terms of profit, with a profit of RON146 million.
Raiffeisen, no. 5 by size, ranks second by profits, with a net result of RON316 million.
Despite the small step forward taken last year, the banking system is fully experiencing the crisis, with bankers struggling with non-performing loans, whose rate exceeded 14% at system level, while in the case of consumer loans, non-performing loans accounted for twice as much.
Because banks hoped this crisis, which started in the autumn of 2008, would end quickly in 2009, and then in 2010, they postponed as much as they could the cleaning up of their balance sheets in order not to affect results reported to their parent banks. But the prolonged crisis did not allow for loans to be rescheduled perpetually despite the fact that the installments were not paid.
Some of the banks managed to make provisions and offset losses generated by non-performing loans, but this was borne by the shareholders, who had to come up with fresh money, as well as by good payers who bear the margin and interest rate increases, despite the fact that reference rates have fallen.
2011 was the last year of banks reporting results based on Romanian accounting standards and it remains to be seen what data will look like when calculated according to international standards (IFRS). (EUR1=RON4.3497)
(English version by Daniela Stoican)