The banking system managed to stay profitable last year, but thenet cumulated income was worth up to 800 million RON (189 millioneuros), almost six times lower than the record 4.4 billion RONposted in 2008, as many small and medium-sized players postedlosses by Romanian accounting standards (RAS).
"The system remained profitable in 2009, but the profit wasworth up to 800 million RON," Nicolae Cinteza, the head of theSupervision Department of the NBR (Romania's central bank) toldZF.
Banks therefore continued to make profit, though small as itwas, in the fourth quarter, after the system-wide income amountedto 680 million RON after the first nine months of 2009. The bankingsystem had posted losses for the first time in the first quarter,pressured by the very high costs required by loan-loss provisions.It was not until the third quarter that banks posted significantprofit, given that they benefited from the change in NBR'sregulations, which allowed them to reduce the exposure to clientsby up to 25% of the value of the collateral held in case of loansbooked as "losses", for which provisions had to be made infull.
The data the banks report to the NBR are calculated in line withthe Romanian accounting standards, which require a much strictertreatment of troubled loans and lead to higher provision-relatedexpenses compared with the international financial reportingstandards used by banks in their reports to foreignshareholders.
Profit in the system is still concentrated around major players,while smaller banks are posting losses. BCR, the biggest localbank, posted 47.5 million euros in net profit (by RAS) last year,banking sources say.
BRD, the second-largest bank announced 156 million euros in netprofit nine months into the year, calculated again in line withRAS. The net profit of the Austrians at Raiffeisen stood at 67million euros. UniCredit Tiriac, another top player, made 53.5million euros in the first nine months (RAS), while BancaTransilvania made merely 11 million euros (RAS).
On the other hand, Volksbank, the third-biggest bank by assetsis posting losses according to the local accounting standards,despite the profits in the range of tens of millions of eurosreported to the shareholders in Vienna.
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