Banca Transilvania, the only high ranking bank with Romanian capital, posted slightly over 10 million RON (2.4 million euros) in net profit in the second quarter of this year, around six times less in RON than the figure recorded in the similar period of 2008, as small and medium-size enterprises – the client segment it has cultivated over the past few years – have been the hardest hit by the collapse of the economy.
The loan loss provisions set up by the bank in the first half of the year went up to 222 million RON (53 million euros), 14 times higher than in the similar period of last year.
"Our activity as a bank is a very good reflection of what is happening with entrepreneurs in Romania, as we have an extensive network and over 1.4 million active clients. The tumble from an 8% economic growth to an 8% decline was bound to affect us. We work with many companies, both Romanian and foreign, and they all have difficulties," Robert Rekkers, CEO of Banca Transilvania, told ZF.
The bank’s first-half net profit amounted to 11 million RON, ten times less than in the corresponding period of 2008. The bank reports its financial results in line with Romanian Accounting Standards (RAS), whose provision requirements are stricter than under international standards (IFRS).
BT is one more bank announcing a decline in results. BCR, the largest financial group on the Romanian market, announced a 20% decline in its net profit (calculated in line with international standards), to 606 million RON (144 million euros), a result which is also linked to large provision costs. BRD, the second-largest bank on the Romanian market in terms of assets, saw a 17% fall in its net profit, to 425 million RON, having tripled its loan loss provisions. Raiffeisen Bank, another top-ranking player, also disclosed a net profit decline.
According to Dutch-born Rekkers, who has been the bank’s CEO since 2001, the second half of the year is expected to be at least as difficult as the first.
The shares of the Bucharest Stock Exchange-listed bank lost almost 1.4% yesterday, to 1.43 RON/share. At this price, the bank’s market capitalisation amounts to almost 365 million euros. Before the crisis, the bank’s value had reached almost 800 million euros.
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