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BUCHAREST (Romania), October 30 (SeeNews) - Banca Comerciala Romana (BCR), part of Austria's Erste Group, said on Wednesday its net profit plummeted by 65.6% year-on-year to 348.8 million lei ($81.6 million/73.6 million euro) in the first nine months of 2019.
Net profit was impacted by the significant one-off provision allocation related to the activity of BCR Banca pentru Locuinte booked in the second quarter of 2019, despite the robust operating result, low risk costs and good performance on all business lines, BCR said in a press release communicating its third-quarter unaudited consolidated results.
A provision in the amount of 150.8 million euro ($167 million) as a result of a Romanian High Court decision in relation to the business activities of Banca pentru Locuinte, BCR's savings and mortgage bank subsidiary in Romania, led to worsening of the overall result, BCR explained.
BCR's non-performing loan (NPL) ratio decreased to 5% at end-September from 5.8% at end-2018, while NPL coverage ratio was 104%.
The bank's operating result rose by an annual 7.8% to 1.43 billion lei in the first nine months, supported by better operating income partly offset by higher deposit insurance in 2019.
Net interest income grew by 11.1% on the year to 1.68 billion lei in the first nine months of 2019, due to a favourable interest rate environment and higher customer loans and deposits.
Net fee income grew by 9.1% year-on-year to 578.9 million lei at end-September, helped by higher fee income generation from insurance business, FX transactions and bond investments of private individual customers. Net trading result decreased 22.9% to 251 million lei, mainly affected by reduced currency revaluation and exchange rate swaps.
Loans and advances to customers increased by 8.6% to 39.5 billion lei as of 30 September 2019, supported by both corporate and retail segments.
Deposits from customers slightly increased by 0.2% to 55.2 billion lei at end-September as of 30 September 2019, supported by the increase in retail deposits.
In 2018, BCR's net profit surged 80% to 1.2 billion lei, supported by an improved operating profit, lower risk costs and growth on all business lines.
BCR provides financial products and services, through a network of 21 business centers and 22 mobile offices dedicated to companies and 431 retail units located in most Romanian cities with over 10,000 inhabitants.
At the level of BCR Group, net profit fell by an annual 75% to 43.8 million euro in the first nine months of 2019, its parent Erste said in its third quarter unaudited statement filed with the Bucharest Stock Exchange.
BCR Group includes BCR bank, BCR Banca pentru Locuinte, BCR Pensii, Societate de Administrare a Fondurilor de Pensii Private, BCR Leasing IFN and BCR Chisinau.
(1 euro=4.7572 lei)