BCR 1Q Net Profit Falls 68.7% To RON76.1M

04.28.2011 By Florentina Dragu

Romanian leading bank group Banca Comerciala Romana (BCR) Thursday reported a 68.7% drop in its net profit after minorities and taxes to 76.1 million lei (EUR18.6 million) in the first quarter, hurt by rising provisions and lower revenue from fees.

Romanian leading bank group Banca Comerciala Romana (BCR) Thursday reported a 68.7% drop in its net profit after minorities and taxes to 76.1 million lei (EUR18.6 million) in the first quarter, hurt by rising provisions and lower revenue from fees.

In the first quarter of 2010, BCR Group posted a net profit of RON243 million.

BCR, a unit of Austrian Erste Group Bank (EBS.RO), said operating profit declined 20.2% on the year to RON608.8 million (EUR144.5 million) in the first quarter.

The group's net operating income fell to RON1.05 billion, from RON1.16 billion in the same period a year earlier, largely due to lower revenue from interest rates and declining loan demand.

"First quarter economic recovery was fragile and many businesses have faced a dramatic decrease in demand. Unfortunately, a large number of businesses had to close operations, particularly the micro companies and SMEs. This had a negative impact on BCR's results," the bank said in its preliminary financial report.

It said net revenue from interests dropped 11.6% on the year to RON859.1 million in the first quarter, while net revenue from fees slid 2.4% to RON154.1 million.

Operating expenses rose to RON446 million, from RON404.3 million in the first quarter of 2010.

Net risk costs stood at RON457.4 million at the end of March, up 0.2% on the year. Non-performing loans stood at 16.8% of total loans.

BCR group's loan portfolio decreased 2.3% on the year to RON47.48 billion in the first quarter, hurt by seasonal factors.

The group's tier 1+2 capital ratio stood at around 12% in the first quarter, above the central bank's minimum requirement of 10%. Solvency ratio was 17.1%.

Overall assets declined by 2% to EUR68.5 billion (EUR16.6 billion) in the first quarter, from 69.9 billion in the same period a year earlier.

BCR's financial data are un-audited, consolidated and computed according to IFRS.

BCR was privatized in 2006, when Erste bought a 61.88% stake from the state, the European Bank for Reconstruction and Development and International Finance Corporation. The Austrian group subsequently raised its stake to 69.3%, by taking over shares from BCR employees.

BCR group includes BCR bank, BCR Banca pentru Locuinte, BCR Administrare Fond de Pensii, BCR Leasing, BCR Asset Management, BCR Securities, Anglo Romanian Bank Limited and BCR Chisinau. (EUR1=RON4.0767)