The bank reported an operating profit of RON1.29 billion, 16.9% lower than in 2015, due to lower operating income and higher investment spending, particularly on IT infrastructure, the bank said in a statement.
BCR granted new retail and corporate loans totaling RON8.8 billion in 2016, with solid growth in consumer loans and particularly mortgage loans under a government-backed guarantee program for first time home-buyers. On the other hand, standard mortgage loans stalled due to a debt discharge law adopted last year, which allows borrowers to walk away from the mortgaged property to extinguish their debt.
The bank’s assets increased to RON67.5 billion in 2016, from RON62 billion the year before, and the bank’s market share rose to 17.1% from 15.8%.
The bank’s net interest income declined 10.3%, to RON1,78 billion, on continued portfolio clean-up efforts and a low-interest environment.
Operating revenue declined 6.7%, to RON2.86 billion, mainly due to low interest and fee income, partly offset by higher trading income.
BCR’s non-performing loan (NPL) ratio stood at 11.8% at the end of 2016, considerably lower compared with 20.2% at the end of 2015, and provisioning stood at 85.3%.
Deposits from customers grew 13.2%, to RON48.2 billion in 2016, from RON42.62 billion in 2015. Customer deposits remain BCR’s main funding source, while the bank benefits from diversified funding sources, including its parent company.