Romanian banks have started to report their profits for 2004 - a year when the lending business rose by nearly 30% and the ROL gained a lot of ground against the euro and the dollar, making results look much better when expressed in foreign currencies.
Although the margins in the system are dwindling, BCR and Banca Transilvania - two of the banks to have published financials for last year - both managed to boost profits by increasing the volume of operations.
The largest bank in the system, BCR, which has a market share of around 30%, announced 215 million euros in gross profits, up 48% in euros on 2003. Return on equity went up from 16.3% to 18.5%, and the cost to revenue ratio dropped to 52% from the 59% seen in 2003.
Having achieved these results, BCR could pay out a 4,140 ROL dividend per share with par value of 10,000 ROL. By the end of 2004, the accounting value of each share had reached 43,900 ROL (1.1 euros), up 15.5% in ROL from the end of 2003.
The bank's assets increased by 1.6bn euros to a total of 6bn euros, largely due to the increased resources attracted and its lending business. The bank expanded its network by 29 branches to a total of 315 last year.
The state owns nearly 37% in BCR; EBRD and IFC own 25%; the five financial investment companies (SIFs) together own 30%; and bank employees the remaining 8%. The bank employees bought their shares at 10,350 ROL, three times lower than the accounting value. EBRD and IFC paid 222 million dollars (175 million euros) for their 25%, representing 1.1 dollars (0.9 euros or 33,000 ROL) per share.
Banca Transilvania, the number two bank in terms of capitalisation listed on the Bucharest Stock Exchange, announced preliminary net profits of 15.1 million euros (608bn ROL), up 20% in euros compared with 2003. The bank's assets rose 90% in euros to 656 million euros.
This means Banca Transilvania managed to exceed the targets set in the S&R budget by 4% in terms of profits and 17% in terms of assets.
The increase to the bank's assets and profits was also due to the raising of several million euros through share issuing on the capital market last year.
Shares in Banca Transilvania, as well as in other banks on the BSE, created significant gains for investors, with the banking sector seen as having high growth prospects for the next few years. The market capitalisation of the bank yesterday reached 432 million euros (12,400 ROL per share: the closing price), which is over three times higher than one year ago.
Banca Transilvania is one of the few banks to have developed through the capital market. Its strategy in recent years has been to capitalise profits by offering bonus shares.
Its biggest shareholder is the European Bank for Reconstruction and Development (EBRD), which holds 15%. Two of the SIFs, Banat-Crisana and Oltenia, each own 5%, while SIF Moldova holds over 2%. The group of businessmen from Cluj, who are also the founders of the bank, also control a significant stake.
Third leading bank on the BSE, Banca Carpatica, is to release its financials on February 7. BRD, the number one on stock market and the second leading bank in the system, has not announced a date for the release of its results. vlad.nicolaescu@zf.ro
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
