RBI's 9-mo profit in Romania rises on lower provisioning costs

Net provisioning costs fell to 21 million euro in the nine months ended September 30, from 39 million euro in the corresponding period of 2016, the bank said in its third quarter 2017 financial report.

In the first quarter of 2017, a provision of 21 million euro was released after Romania's Constitutional Court ruled that the Walk-away Law could not be applied retroactively. Under the bill, adopted in April 2016, banks can seize from mortgage defaulters only the property for which the borrowers have been granted a loan up to 250,000 euro but cannot claim any further payment. In October 2016, the Constitutional Court repealed sections of the law connected to its retroactive application.

Raiffeisen Bank's operating income from operations in Romania edged down 0.6% on the year in the first nine months of 2017, to 335 million euro. Net interest income rose by an annual 1.2% to 194 million euro, driven by lower interest expenses for deposits from customers.

The lender's non-performing loan (NPL) ratio in Romania dropped to 7.6% at the end of September, from 8% a year earlier, while the coverage of NPLs with provisions rose to 73.7%, from 73.4% a year earlier.

The bank's loan portfolio in Romania increased 3.3% on the year to 4.92 billion euro, driven by sustained performance in the retail segment. Customer deposits increased 14.5% year-on-year to 6.17 billion euro at end-September, mostly driven by household savings. The ratio of net loans to deposits fell to 74.9% as of the end of September 2017, from 82.3% in a year earlier.

Raiffeisen Bank Romania had 2.29 million customers at end-September, up 8.8% on the year.

Raiffeisen Bank had 460 branches in Romania at the end of September and employed 5,372 people.

Following are details on RBI’s performance in Romania (in millions of euro):

($ = 0.8584 euro)