August 10 (SeeNews) - Raiffeisen Bank International (RBI) said on Thursday its after-tax profit from operations in Romania jumped 46% on the year to 55 million euro ($64.5 million) in the first half of 2017 due to lower provisioning costs.
In the six months through June, net provisioning fell to 20 million euro from 26 million euro in the corresponding period of 2016, the bank said in its H1 2017 financial report.
In the first quarter of 2017, a provision of 22 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 In October 2016, the Constitutional Court repealed sections of the law connected to its retroactive application.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 rose 2.8% on the year in the first six months of 2017, reaching 224 million euro. Net interest income rose by an annual 1.5% to 129 million euro in the first six months of the year.
The lender's non-performing loan (NPL) ratio in Romania stayed flat to 8% at the end of June, the same as in the previous year. The coverage of NPLs with provisions rose to 72.4% in the first quarter, from 67.6% a year earlier.
The bank's loan portfolio in Romania increased 3.4% on the year to 4.78 billion euro, driven by sustained performance in the retail segment. Customer deposits increased 16% year-on-year to 6.01 billion euro at end-June, mostly driven by household savings. The ratio of net loans to deposits fell to 74.9% as of the end of June 2017, from 83.7% in a year earlier.
Raiffeisen Bank Romania had 2.29 million customers at end-June, up 9% on the year.
Raiffeisen Bank had 469 branches in Romania at the end of June and employed 5,330 people.
Following are details on RBI’s performance in Romania (in millions of euro):
|
H1 2017 |
H1 2016 |
Profit after tax |
55 |
38 |
Pre-tax profit |
65 |
45 |
Operating income |
224 |
218 |
Net interest income |
129 |
127 |
Net fee and commission income |
84 |
90 |
Net provisioning for impairment losses |
(46) |
(26) |
Loans |
4,784 |
4,627 |
Deposits |
6,018 |
5,189 |
Total assets |
7,747 |
7,122 |
($ = 0.8516 euro)
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