BRD, the second-largest bank on the market, generated net income worth 101m euros in the first half of the year, down 28% from the corresponding period of 2008. In Q2, the bank logged 52m euros in profit, up from the 49m euros registered in the first three months of the year.
Gross operating income went down by around 7m euros from H1, 2008, to 219m euros, though in RON it went up by 19.4%.
The net result was hurt by costs related to risk provisions, which have doubled, to 96m euros. In mid-2009, the volume of consumer loan provisions revolved around 235m euros, whereas loans classified as outstanding and doubtful amounted to 218m euros, up almost 85% from the level reached in late 2008. These came to weigh almost 3% in the volume of loans to customers.
Patrick Gelin, BRD chairman, considers the bank managed to keep its results at a satisfying level, despite the recession. "The first half of 2009 was marked by an outstanding slowdown in loan demand and by steeply rising risks both as regards natural persons and SMEs, a situation that shows the extent of the recession felt in the first half."
He maintains the bank proved its endurance in a difficult environment, due to the efficiency of internal procedures, the moves to cut expenses and the quality of the loan portfolio.
After the all-time high reached in the first quarter of this year, the amount of loans dropped in Q2, both on the retail segment (-1.5%) and on the corporate front (-4.4%), with the adjustment more visible in the case of corporate loans. The retail volume thus reached 3.75bn euros, while on the corporate segment it amounted to 3.9bn euros.
The lending downturn was reflected in the only 8% increase, in RON, of the net commission income in H1 from a year ago, while the net interest rate margin climbed by 14% in RON, to the equivalent of 172m euros.
Deposits of natural persons posted a slight drop in Q2, but remained close to the level of Q1, totalling 14.58bn RON (3.47bn euros). The drop was steeper in the case of corporate deposits, to 14.49bn RON (3.45bn euros), furthering a trend that debuted last summer.
The solvency rate stood at 11.6%, from 11.7% in December 2008, above the 10% minimum threshold required by the National bank. BRD officials say there is no need of a capital increase this year.
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