BRD sees 501m-lei net income in 2010

BRD-SocGen, the second biggest bank in terms of assets, ended 2010 with net income worth almost 501m lei, down 36% from 2009, in line with the Romanian accounting standards (RAS).
This is the biggest income derived on the banking market in 2010, considering only 20 banks made profit, yielding total cumulated losses of 304m lei on the entire market. According to some banking sources, BRD is followed at a distance by Raiffeisen and BCR in terms of RAS-calculated net annual income.
"The figures demonstrate BRD's endurance capacity and the soundness of its business model. Net income suffered a visible decline, by 36%, on the rising net risk costs, understandable in a challenging economic context, but operating income rose by 8%, standing proof of a satisfying current activity," stated Guy Poupet, BRD chairman.
The main profit source was the interest margin, which went up by 36%, while net fee income dropped by 4%, and treasury operation profit slipped by 17%.
Poupet says the crisis fallout has made an impact the banking system and BRD as well, translating into a "continued weakness" of activity volumes and of new loan "production" in particular. At the same time, the deteriorating asset quality pushed for a 41% increase in provision expenses, to almost 1.6bn lei.
BRD head says the bank has made "significant efforts" to support operations with clients, resorting to promotional offers and marketing activities. However, as inactive clients were dropped and the pace at which new ones were added slowed down, the client portfolio shrank by around 45,000 individuals and 8,000 companies.
"We're approaching 2011 with caution and a certain serenity given by financial soundness and the support of the parent-bank".