Poupet, BRD: Competition forces us to lower commissions

Market competition has been one of the factors behind the decline in BRD's commission revenues in the first half of the year, alongside the introduction of the new regulations on early repayment commissions, says Guy Poupet, president of BRD-SocGen, the second-largest bank on the Romanian market in terms of assets.

"The decline in net revenues from commissions was generated by the decline in the volume of activity, by the introduction of new regulations on early repayment commissions, as well as by market competition, which forces us to lower commissions in order to preserve our position," Poupet told ZF in an interview.

Net revenues from commissions fell by 2% in the first half of the year, which contributed to a 13.7% decline in net profit, to 367 million RON (88.5 million euros).

A major factor set to boost competition among banks over the next period is the emergency ordinance on credit contracts that entered into force in June, but which the Government has just committed to modify to the IMF so that it would no longer apply to old loans.

In compliance with the ordinance, BRD has dropped early repayment commissions, which used to amount to up to 5%, capping them at 1% for loans with fixed interest rates if the repayment occurs more than a year ahead of maturity, and a zero commission set in the case of loans with a floating interest rate.