Romania's BRD net profit surges 58% in H1

BUCHAREST (Romania), August 1 (SeeNews) - The first-half net profit of Romania's BRD bank [BSE:BRD] soared 58% to 62 million lei ($18.6 million/14 million euro), positively influenced by an improved cost-to-income ratio, it said on Thursday.

The bank managed to reduce its operating costs by 8.9% on the year and the cost/income ratio improved by an annual 1.9 percentage points to 45% in the first half of the year, BRD, majority-owned French financial services group Societe Generale, said in a statement.

The lender's net risk costs decreased by an annual 7.8% in the first half.

BRD's net banking income totalled 1.36 billion lei in the first half, down 5.0% on the year mainly due to a lower net interest margin.

The loan portfolio edged down by a yearly 1.0% to 34.85 billion lei at the end of June, while deposits grew by 0.9% from a year earlier to 33.26 billion lei. As a result, the loan/deposit ratio improved to 91.4%, falling 6.2 percentage points from June 2012.

"We view these results as positive considering them as an evolution in the right direction but we do not expect a strong market reaction since after BCR’s huge release of deferred tax liabilities there were hopes that BRD-GSG would undertake a similar action" Raiffeisen Capital & Investment Research said in a note to investors.

Details follow (in millions of lei):

H1 2013 H1 2012
Net profit 62.2 39.4
Gross profit 89.0 46.2
Operating profit 1,360 1,433
Net commission income 366.4 376.5
Net interest income 851.7 932.9
Total assets 44,966 47,924

The bank had 886 units in Romania at end-June, down from 915 at end-2012.

The results are reported under international financial accounting standards.

Blue chip BRD was trading up 0.64% at 7.90 lei by 0907 CET on the Bucharest bourse on Thursday.

(1 euro = 4.4163 Romanian lei)

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