Banca Comerciala Romana (BCR), the largest Romanian lender by assets, reported a RON 305 million (EUR 67.4 million) net profit for the first half of the year. This is down from the RON 636 million (EUR 141.5 million) reported for the first six months of 2016.

The bank says the decline comes from the “base effect from significant gain following the sale of certain participations coupled with risk provision releases generated by recoveries from non-performing loans booked in the first half of 2016. “

The operating income decreased by 2.3% to RON 1,439.53 million (EUR 317.33 million) from RON 1,473.0 million (EUR 327.7 million) in H1 2016, mainly driven by reduced net interest income and lower commission income partly compensated by higher trading result.

The operating result stood at RON 729.8 million (EUR 160.9 million), 3.6% higher than in the previous year, at RON 704.7 (EUR 156.8), mainly due to lower operating expenses.

The net interest income declined by 6%, to RON 878.73 million (EUR 193.71 million), from RON 934.7 million (EUR 208 million) in H1 2016, on the back of continued non-performing loans (NPL) portfolio resolution and a low interest rate environment. The NPL ratio stood at 11% at the end of June 2017, down from 14% at the end of June 2016. The decrease was driven by recoveries, sales of NPL portfolios and write-offs.

In its retail business, BCR granted new loans totaling RON 2.6 billion (EUR 577.7 million). Secured loans have been backed by the Prima Casă Program on the basis of the new funds allocated.

At the same time, loans and receivable to customers increased by 0.5% to RON 32,437 million in the first half of 2017, from RON 32,291 million in the same period of 2016, as a result of increased lending volumes on the retail segment.

Deposits from customers decreased by 2.1% to RON 47,208.1 million (EUR 10,370.2 million), compared to RON 48,235.2 million (EUR 10,626.8 million) at the end of December 2016, due to a decrease in corporate deposits.

editor@romania-insider.com