BCR Sees EUR120M Pretax Profit In 2012

01.13.2012 By Roxana Pricop , Razvan Voican

Romania’s largest lender by assets Banca Comerciala Romana (BCR), a unit of Austrian Erste Group Bank AG, estimates a pretax profit of 516 million lei (EUR120 million) in 2012, people in the banking sector told Ziarul Financiar.

The bank is due to approve its 2012 revenue and expenditure budget at a shareholder meeting January 27.

BCR reported a net profit of 67.6 million lei (EUR15.6 million) in the first nine months, down sevenfold on the year, after it swung to a loss of RON90.5 million in the third quarter.

The bank's results were severely hit by rising provisions and higher costs, as the lingering financial crisis continued to put pressure on loan quality. Non-performing loans topped 20% of total lending at the end of September.

BCR's tier 1+2 capital ratio reached 10.7% in September, slightly above the central bank's minimum requirement of 10%. To increase its solvency ratio, the bank hiked its share capital by RON467.7 million to RON1.55 billion (EUR361 million) at the end of 2011. The mother bank contributed EUR100 million to the capital increase.

Sources in the banking sector said BCR could need to raise further capital in the coming months, depending on the bank's policy concerning provisioning once the local banks adopt the International Financial Reporting Standards (IFRS), instead of local accounting standards.

BCR is 89.12%-owned by Erste Group Bank AG (EBS.RO). The Austrian group has increased its stake in the Romanian bank from 69.4% at the beginning of 2011, after it bought around 20% from four of the five minority SIF holders.

A fifth SIF is yet to announce whether it plans to sell its 6.51% stake in BCR to Erste.

(English version by Florentina Dragu)