BRD (Romanian Development Bank) - Groupe Société Générale, the second-largest bank in Romania, will pay bigger dividends this year, due to laxer regulations on the legal reserves.
"Our dividend policy for next year will be just as generous as it has been so far, perhaps even more so. The total value of the dividends we will grant for last year will be much higher than in the previous years, because we used to calculate the dividends after we had set aside the funds for the necessary reserves. However, the legal reserves will disappear this year, whereas the credit risk reserves have dropped from 2% to 1% of the total value of granted loans," Bogdan Baltazar, chairman of the BRD Board told Ziarul Financiar.
Last year, BRD distributed gross dividend worth 862 ROL/share, with the bank's stock priced at 16,200 ROL/share, considering the shares with 5,000 ROL face value were split into shares with 3,000 ROL in nominal value. BRD stock reached a new all-time high on Wednesday, up 1% from Tuesday, with the market capitalisation climbing to $938 million.
Brokers are already saying that the bank's stock is growing too much. "I believe the banking stocks are beginning to be overvalued. However, the market price is also tied to the foreign investors' forecasts on the future evolution of the Romanian banking sector," the head of a Romanian brokerage said.
BRD - Groupe Société Générale has 4,181.4 billion ROL in capital, divided into shares with 3,000 ROL in face value. The bank had a good year in 2003, according to Baltazar, as the financial results met the budgeted targets.
"We had a good year and this was deemed as a performance, as we operated in less than favourable economic circumstances. More exactly, we operated in an unrestructured economy, with significant uncertainties related to the evolution of the exchange rate and under pressure from the economic agents, which, in our opinion, are quite frustrated by the economic trends," Bogdan Baltazar stated.
Because of the norms and regulations imposed by the Bucharest Stock Exchange, the BRD official could not reveal the bank's financial results for 2003.
According to the latest official figures, BRD - Groupe Société Générale reported net profit worth 1,773bn ROL in the first nine months last year, up 8% in nominal terms from September 2002. oana.nuta@zf.ro
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