Small entrepreneur
Cards and accounts
Currency and monetary market
Newsroom
Capital markets
Subsidiaries and associated entities
Research Reports
CSR
Investors and shareholders
Custody, storage, issuers
Careers
SME^{< 1M Euro}
Loans
SME^{1-50M Euro}
Savings and investments
Agriculture
Corporate
Online banking

BRD Q1 Results: Enhanced Balance Sheet Structure And Lower Net Cost Of Risk

06 May 2014

Improved loans/deposits ratio: 79.5%, generated by significant growth of deposits: +6.9% vs March 2013;
Enhanced operational efficiency: -2.8% in operating expenses compared to Q1-13;
Lower net cost of risk (-29.7% vs Q1-13);
Comfortable capital adequacy ratio: 15.8% under Basel III;
Net profit of RON 37 million.

The Romanian banking system continued to register an overall decrease in loans’ volume (-2.9%) over the last 12 months, marked by the negative evolution of the corporate segment, while deposits maintained their positive trend (+5.5% yoy), especially on the corporate customers’ side (+8.4% yoy).

BRD outstanding gross loans to individuals reached RON 17.2 billion, up 1.3% yoy (vs -1.1% for the market). Housing loans’ outstanding amounts increased by 16.4% yoy, significantly above the market (+9.4%), thanks to our leadership position on “Prima Casa” program. The corporate lending activity remains low, generating a decline of 8.8% (vs March 2013) of gross volume, to RON 16.4 billion.

The financing activity on corporate segment remains sensitive to the weak demand, but a more broad-based economic growth in the next coming months of 2014 should be a counterbalancing factor. We count inter alia on the existing and new investors` appetite for the Romanian economy and European funds absorption in order to finance new projects in the private and public corporate area.

Deposits increased by 6.9% compared with March 2013, sustained both by corporate and individuals deposits’ evolution. In this context, net loans to deposits ratio improved to 79.5% as of March 2014 (vs 94.6% as of March 2013).

Net banking income was down 12.3% compared Q1-13, mostly triggered by the decrease in net interest margin, generated by a lower share of net loans in total assets and the increased liquidity buffer. The net fees and commissions had a positive evolution +1.7%, supported by syndicated loans, sales of retail packages, custody services and equities brokerage.

The bank continued its cost optimization processes which led to a 2.8% reduction in operational expenses vs Q1-13.

Non-performing loans (“NPLs”) ratio according to IFRS stood at 24.9% as at March 2014 (vs 24.8% as at December 2013), while the NPLs ratio according to the central bank definition (Loss 2 ratio) was 21.8% as at March 2014, in line with the banking system average. The net cost of risk decreased by 29.7% in Q1-14 compared with the same period of 2013 and stood at 298 basis points (vs. 393 basis points in Q1-13). IFRS NPLs coverage with provisions was further improved to 70.9% as at March 2014 (vs 68.9% as at December 2013).

Net profit for the period is of RON 37 million.

With a solid capital base, the bank maintains a comfortable capital adequacy ratio of 15.8%, under Basel III regulations.

“We will pursue our work for cost of risk normalization; and will continue our efforts on implementation of cost optimization measures. Simultaneously, we will start to capitalize on the fine tuning of our origination processes in order to boost our lending activity to both retail and corporate customers”, said Philippe Lhotte, BRD’s Chairman and CEO.

The interim report is available to public and investors on the website of the bank: www.brd.ro. Copies of the documents can also be obtained upon request, free of charge, at the head office of BRD-Groupe Société Générale, located at 1-7, Ion Mihalache Bd., 1^st district, Bucharest.

Figures are at stand alone level, according to the International Financial Reporting Standards (IFRS)

BRD-Groupe Société Générale is the second bank in Romania in terms of assets and the no. 1 bank in the Romanian syndicated loans market. BRD - Groupe Société Générale has 2.3 million customers and operates a network of approximately 880 branches. With over 2.3 million valid cards and a network acceptance over 21,600 POS, and 1,500 ATMs, BRD is no. 1 on the Romanian card market. With factoring operations of EUR 918 million in 2013, BRD is the leader of the Romanian factoring market.

BRD is part of Société Générale Group, one of the largest European financial services groups. The group has 154,000 employees in 76 countries and 32 million customers worldwide in its three key activities:

Retail banking in France
International retail banking, financial services and insurance
Corporate & Investment banking, private banking, asset management and investor services

Search form

BRD Q1 Results: Enhanced Balance Sheet Structure And Lower Net Cost Of Risk