It said its non-performing loans ratio dropped to 14% from 23.1% at the end of June 2015, due to sustained efforts to reduce NPL legacy and improve performing portfolio quality.
“BCR continued to improve its balance sheet and maintained a solid lending stream. (…) Romania needs infrastructure, as it needs to profit from economic opportunities or answer social challenges. BCR holds substantial capital, excellent liquidity and a significant solvency to support these priorities of our country,” said Sergiu Manea, CEO of BCR.
The operating result stood at RON704.7 million, 9.5% lower than in the same period last year, driven by lower operating income, impacted by reduced unwinding contribution, margin pressure and low interest rate environment coupled with higher costs from booking full contribution to deposit insurance fund in 1Q 2016, the bank said.
BCR granted new retail loans totaling RON2.6 billion in the first six months, with solid sales of both unsecured and secured loans – driven by acceleration of the government-backed mortgage lending program.
On the corporate segment, BCR granted new loans totaling RON1.5 billion in the first half of the year, and co-financing of EU-funded projects was also solid with BCR holding over 30% market share and a portfolio of over RON7.2 billion co-financed.
The banks’ net interest income declined 7.8% on the year in the first half, to RON934.7 million, on the back of continued NPL portfolio resolution, efforts to price competitively in the market and a low interest rate environment.
Net fee income was up 3.6%, to RON354.1 million, due to higher transaction banking fees.
Net trading result increased 27.1%, to RON156.3 million, on the back of higher results from sales of financial instruments.
The bank’s solvency ratio under local standards as of May 2016 stood at 23%, well above the regulatory requirements of the Romanian central bank of at least 10%.
Deposits from customers grew 2.9% in the first half, to RON43.8 billion end June 2016, from RON42,6 billion end-December 2015, particularly driven by retail deposits and slightly higher inflows from corporate clients. Customer deposits remain BCR’s main funding source, while the bank benefits from diversified funding sources, including its parent company.
The banks said it plans to keep its focus on local currency lending to reverse the currency mix of the loan portfolio in favor of local currency on medium to long term and fully use the strong self-funding capacity in the Romanian currency.