The second biggest Romanian bank by assets, Banca Comerciala Romana (BCR), part of Erste Bank Group, reported RON 499 million (EUR 104 mln) net profit in the first half of the year (H1) compared to RON 20.8 mln (EUR 4.4 mln) losses in the same period last year.
The losses in 2019 were generated by provisions related to a negative court decision impacting BCR's housing bank subsidiary (BCR Banca pentru Locuinte).
The operating result improved by 9.3% to RON 898 mln (EUR 187 mln) in H1 this year, on the back of higher operating income and lower operating expenses.
Impairment result from financial instruments recorded an allocation of RON 170 mln (EUR 35.3 mln) in H1 this year, compared to a release of RON 89 mln (EUR 18.7 mln) in H1 last year.
This result has been mainly influenced by updated risk parameters to reflect the economic downturn and the implementation of stricter rules for credit risk classification under IFRS 9 applied to client exposures affected by the current situation.
The NPL ratio reached 4.5% as of June 2020, slightly higher than 4.1% recorded as of December 2019. This evolution was due to a one-off large new default registered in the corporate segment, after a long period of almost no new NPL formation. At the same time, the NPL provisioning coverage remained relatively stable at 117.4% as of June 2020.