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Romania's BRD bank Jan-Sept net profit rises 11%, NPLs drop

Romania's BRD bank Jan-Sept net profit rises 11%, NPLs drop BRD Bank Romania

BUCHAREST (Romania), November 6 (SeeNews) - BRD [BSE:BRD], Romania's third-largest bank by assets, said on Wednesday its consolidated net profit rose 11% year-on-year in the first nine months of 2019, reaching 1.26 billion lei ($295 million/265 million euro).

Net profit growth was fuelled by robust commercial and operational performance as well as by a positive cost of risk, BRD, part of France's Societe Generale group, said in a statement filed with the Bucharest stock Exchange, BVB.

The ratio of BRD's non-performing loans (NPLs) fell to 4.0% at the end of September, from 5.8% a year earlier, while the coverage of NPLs with provisions increased to 74.1%, compared to 73.1 at end-September 2018.

The net cost of risk rose 24.3% to 220 million lei, due to strong recovery performance, good quality of originated loans and exceptional insurance indemnities’ recognition.

BRD’s net banking income amounted to 2.39 billion lei at the end of September, up 8.5% on the year, stemming from both net interest income and non-interest income growth. Net interest income grew 10% year-on-year to 1.5 billion lei,  benefiting from expanding volumes across all segments, while favorable structure shifts and higher market interest rates also contributed to the rise.

The net loans’ outstanding amount to customers increased year-on-year by 2.9% to 29.5 billion lei on all business lines, mainly driven by growth of loans to individuals and large corporate customers.

Total deposits rose by 0.9% on the year to 43.9 billion lei in January-September, boosted by a dynamic real wage growth.

"The first nine months of 2019 were commercially dynamic. With increased lending on both retail and corporate segments, we kept our commitment to finance the Romanian economy in a responsible way, through an improved and balanced offer. The development of asset management activity was also remarkable,  reflecting our strategy to capture the potential of the alternative savings market," BRD Group CEO Francois Bloch said.

BRD's capital adequacy ratio was 20.9% on a standalone basis under Basel III regulations, well above the regulatory requirements of 10%. The bank's total assets edged up to 54.1 billion lei at end-September from 54 billion lei at end-2018.

Besides the bank, the BRD Group in Romania includes BRD Sogelease IFN, BRD Finance IFN and BRD Asset Management SA.

The overall net profit of the BRD Group at end-September was 1.22 billion lei, up 7.4% on an annual comparison basis. The group's total assets rose to 55.9 billion lei as of end-September, from 55.7 billion lei at end-2018.

BRD was the fourth largest lender by assets in Southeast Europe at the end of 2018, and the third biggest in Romania, according to the 2019 edition of SEE Top 100 Banks ranking published by SeeNews.

Societe Generale is present in Romania since 1980, being the only significant bank from Western Europe that was present in the country during the communist period. In 1999, it took part in the process of privatization of Banca Romana pentru Dezvoltare and acquired 51% of the bank’s share capital. 

As at September 30, 2019, BRD had 674 branches across Romania.

Shares of blue-chip BRD traded 0.96% higher at 14.66 lei by 1422 CET on Wednesday on the BVB.

(1 euro=4.7626 Romanian lei)