BRD Societe Generale, the third largest lender in Romania by assets, reported a net profit of RON 1,066 billion (EUR 230 million) for the first nine months of 2017. This is a 76% year-on-year (y-o-y) increase, against a dynamic commercial activity and improved risk profile, the bank said.

The profit increase was mainly due to provision reverses related to non-performing loans. The group recorded a net gain of RON 271 million (EUR 59 million) compared to net risk costs of RON 362 million in the same period of last year.

Meanwhile, the operational profit went down by 7.5% year-on-year, to RON 997 million (EUR 217 million), due to higher operational expenses.

BRD Group’s net banking income amounted to RON 2,061 million (EUR 448 million), down 2.4%. However, the net banking income increased by 3.4% excluding the gains on available for sale assets and the VISA Europe transaction in Q3 2016, which totaled RON 127 million (EUR 27.6 million), and gains on available-for sale assets of RON 9 million (EUR 1.9 million) in Q3 2017.

The net fees and commissions income (-2.4% y-o-y) were sustained by revenue growth on card activity, higher commissions from capital and financial markets services and from electronic banking subscriptions, but were impacted by the lower fees on transactions.

The gross loans increased by 5.7% y-o-y by the end of September 2017, with household loans up by 6.2% and loans to companies higher by 5.2% y-o-y. Housing loans were the main growth driver on the individuals’ segment (+10.7% y-o-y). The banking system deposits growth was above 9% y-o-y, for both individuals and companies, in spite of low interest rates.

The number of active retail customers increased by 34,000 y-o-y, of which individuals +31,000 and small business customers +3,000. Individual customers’ equipment rate (the average number of products per active customers) further increased to 4.16 from 4.04 at the end of September 2016. The stock of internet and mobile banking contracts reached 1.30 million, up 25% y-o-y. In particular, the number of MyBRD Mobile subscribers rose by 55%.

The deposit base expanded further on an annual basis (+3.6% compared to September 2016), pushed up by retail customers’ savings (+7.6% y-o-y). In a context of persistently low interest rates, deposits on current accounts further expanded, by 19% compared to the end of September 2016. The ratio of net loans to deposits was 72.0% (+2.1 pts vs. September 2016 and +4.4 pts up compared to December 2016).

BRD Group’s retail loans grew 7.1%, sustained by the strong advance of new consumer loans and housing loans, due to targeted campaigns and market appetite for new lending. Individuals’ loan production further expanded (by 12.4% versus January-September 2016) to RON 4.8 billion (EUR 1.04 billion). On the household loans segment it had a market share of 16.9% at the end of September 2017. Non-retail loans had an annual increase of 5.6%, driven by credit to large corporate clients (up 10.9% y-o-y).

“The first nine months of 2017 were marked by a dynamic commercial activity, leading to an acceleration of core net banking income growth. Combined with non-recurring positive cost of risk items, this evolution translated into a very strong increase of the financial performance. BRD’s broad-based credit growth testifies to the group’s commitment towards financing the economy. Further, we will continue to step up on digitalization and innovation in order to permanently improve our products and services, and enhance customer experience,” François Bloch, CEO BRD-Groupe Societe Generale, said.

editor@romania-insider.com