February 28 (SeeNews) - Romania's Banca Comerciala Romana (BCR), majority-owned by Austria's Erste Group, posted a consolidated net profit attributable to owners of the parent of 1.04 billion lei ($245.4 million/231.7 million euro) in 2016, up 14% year-on-year, supported by new clients and improvement of the quality of its portfolio, the bank said on Tuesday.
BCR's non-performing loans (NPL) ratio decreased to 11.8% at the end of December from 20.2% a year earlier, while NPL coverage ratio rose to 85.3% from 77.4%, BCR said in its annual unaudited, consolidated financial statement.
"In 2016, BCR focused on customer business and continued investing in the infrastructure for more convenient, reliable and accessible services. We believe that is the right strategy ahead of us. Owing to a committed shareholder through the cycle, we count on a very solid capital position and a strong balance sheet, allowing us to further extend financial intermediation throughout Romania," CEO Sergiu Manea said.
In 2016 BCR granted 8.8 billion lei in new retail and corporate loans.
Net charge of impairments on financial assets not measured at fair value through profit and loss recorded a positive contribution of 280 million lei in 2016, from 72.9 million lei a year ago, driven by further NPL resolution and recoveries coupled with improved portfolio quality.
The operating profit of Romania's largest bank by assets fell 16.9% to 1.29 billion lei in 2016, as a result of lower operating income coupled with higher investment, mainly in IT infrastructure.
Operating income declined 6.7% to 2.86 billion lei in 2016, mainly reflecting a drop in net interest income and slightly lower net fee and commission income.
Net interest income fell by 10.3% to 1.78 billion lei, mainly on the back of continued NPL portfolio resolution, efforts to price competitively in the market and a low interest rate environment.
Net fee and commission income fell 2.2% to 708.9 million lei, due to lower brokerage fees from subsidiaries, partially offset by higher fees from banking transactions as a consequence of bank strategy to enhance electronic channels usage.
The net trading result rose 1.9% to 314.3 million lei in 2016, on the back of stable development of customer business, the report showed.
BCR's cost-to-income ratio rose to 54.8% in 2016 period from 49.2% in 2015.
BCR had total assets of 67.51 billion lei at end-2016, up from 62.36 billion lei at the end of 2015.
BCR offers a complete range of financial products and services through a network of 512 retail units located in most towns with more than 10.000 inhabitants, across the whole Romania, as well as 21 business centres and 23 mobile offices dedicated to companies. As of December 2016, BCR was employing 7,078 people.
(1 euro = 4.5115 lei)