Romania's BRD’s net profit up 27% in 2023

The profit was driven by rising volumes and elevated interest rates, offset in part by higher expenses attributed to growing term deposits, BRD said in a report filed with the Bucharest Stock Exchange on Thursday.

The lender’s net banking income rose to 3.722 billion lei in 2023 from 3.288 billion lei a year earlier. The net interest income rose by an annual 15.7% to 2.592 billion lei, while the net fees and commissions income inched down by 0.05% to 718.9 million lei.

Credit risk indicators remained at reasonable levels, with the non-performing loans (NPL) ratio reaching a historical low of 1.9% at the end of 2023, down from 2.6% in the same period the year before. The NPL cover ratio was maintained at a level of 75.9%, marginally lower than the 76.5% ratio recorded at the end of the previous year.

BRD granted 7.7 billion lei worth of loans to individuals in 2023, marking its best year for new consumer loans with an annual growth rate of 20%. Corporate financing increased by 23% on the year in 2023, fuelled by an 18.4% hike in the small and medium-sized enterprises (SMEs) segment and a 25.8% jump in loans granted to large corporations.

Deposits grew by 10.1% on the year in 2023, with retail and corporate deposits increasing by 9.9% and 10.6%, respectively.

The bank's total assets increased by 13.8% on the year to 81.381 billion lei at end-2023, while its liabilities totalled 72.916 billion lei following an annual decrease of 10.9%.

BRD is expecting a new 2% government tax on banks’ turnover to cost it between 100 million lei and 120 million lei in 2024, CEO Etienne Loulergue said during the earnings call.

BRD shares traded 0.33% higher at 18.14 lei as at 1138 CET on Friday on the Bucharest Stock Exchange.

(1 euro=4.9764 lei)