The aggregated net profit of the Romanian banking system was revised from RON498 million in the initial form reported by the central bank, to just RON49 million.
In other words, the system was again on the verge of ending the year in the red, after a negative result of RON2.3 billion posted in 2012.
But what lies behind the tenfold decline in the final figures, from RON498 million (EUR113 million) to RON49 million (EUR11 million)?
Market sources stated the deep adjustment, of around EUR100 million, was triggered by two large banks’ moves to review the results they had sent to the centrla bank after auditors checked some figures.
This is an unusual situation considering the RON498 million was also included in a presentation made by the central bank governor himself in April 16, namely after most large banks had officially reported 2013 figures including auditors’ reports.
Among the top banks on the market, only four reported profits of above RON100 million, while three posted losses. The largest net profit in the entire system was reported by BCR, with a consolidated gain of RON598.7 million, audited by Ernst&Young.
Individually, BCR generated a net profit of RON335.5 million and in this context Raiffeisen would be in fact the lending institution boasting the highest net profit in 2013, of RON458.4 million, audited by the same E&Y.
Raiffeisen officials say the bank was not in the situation of revising 2013 figures. Also, the parent bank of BCR mentioned E&Y did not require corrections for BCR’s 2013 profit.
BRD, with a net loss of RON385.7 million, significantly hurting the aggregated result of the system, is listed on the bourse and was supposed to notify its investors in the case of a major correction.
Banca Transilvania is also listed and it generated net profit of around RON375 million.
It remains to be seen whether the profits of the other banks with positive results were smaller than the initially reported levels, or whether the losses of some banks such as Volksbank or Bancpost were wider than initially estimated.
The stabilization of provisions in IFRS above the RON36 billion threshold in the first four months of the year allowed for a gradual increase of net profit at system level to RON748 million at the end of April, slightly above the level of the same period of 2013.
Bankers could be forced to set up additional provisions in the coming months to fully profit from the central bank’s action plan meant to remove NPLs from the system.
(English version by Catalina Apostoiu)