The bank reported an operating profit of RON1.067 billion, 11.1% lower than in the same period last year, on lower operating revenue affected by non-performing loan (NPL)contracts and a low interest environment.
“We’re counting on a solid balance sheet that allows us to focus on developing our business but, on the other hand, we are concerned about legislative challenges in the banking sector,” said BCR CEO Sergiu Manea.
Romania this year adopted a debt discharge law that allows retail mortgage borrowers to return real estate collateral to banks and have their loan written off. Also, despite central bank recommendations, the Parliament recently passed a bill converting Swiss franc loans to Romanian lei at historical exchange rates.
BCR granted new retail and corporate loans totaling RON6 billion in the first nine months, with solid growth in mortgage loans supported a by a government-backed guarantee program for first time home-buyers.
It said its NPL ratio dropped to 13.3% end-September, from 22.2% in September 2015 and provisioning stood at a comfortable 79.7%.
The bank’s net interest income declined 10%, to RON1.356 billion, in the first nine months, on continued portfolio clean-up efforts and a low-interest environment.
Operating revenue declined 5.3%, to RON2.184 billion, mainly due to low interest income, partly offset by fee and trading incomes.
The bank’s solvency ratio under local standards as of August 2016 stood at 22.9%, well above the regulatory requirements of the Romanian central bank of at least 10%.
Deposits from customers grew 4.6%, to RON44.6 billion at the end of September from RON42.6 billion end-December 2015. Customer deposits remain BCR’s main funding source, while the bank benefits from diversified funding sources, including its parent company.