Second-biggest lender in Romania sees higher operating results amid difficult market context

BCR, the local subsidiary of the Austrian group Erste and the second-biggest bank in Romania by assets, recorded a net profit of RON 846 mln (EUR 175 mln) in the first nine months of this year, up 2.4 times compared to the same period of 2019. The higher net profit came from improved operating results across the board as well as exceptional costs in Q2 2019 generated by an impairment on BCR's housing loans subsidiary – BCR Banca pentru Locuinte.

BCR's operating result improved by 6.6% to RON 1.4 billion (EUR 291 million) in the first nine months of this year, from to RON 1.32 bln (EUR 278 mln) in the same period of 2019, on higher operating income and lower operating expenses.

Net interest income increased by 5.7% to RON 1.78 bln (EUR 368 mln), favored by higher loan volumes in both retail and corporate, partly offset by lower money market interest rates.

Net fee and commission income decreased by 13.3% to RON 502 mln (EUR 104 mln), driven by lower cash withdrawal and waived withdrawal fee at non-BCR ATMs in April and May as support measure during the state of emergency. The net trading result increased by 2.2%, to RON 257 mln (EUR 53.2 mln).

BCR recorded net impairments from financial instruments of RON 277.5 million (EUR 57.5 million) in the first nine months of this year, as compared to a gain of RON 122.8 million (EUR 25.9 million) in the same period of 2019. This result has been mainly influenced by updated risk parameters to reflect the expected economic downturn coupled with the implementation of stricter rules for credit risk classification under IFRS 9 applied to client exposures affected by the current situation.

BCR's stock of net loans advanced by 6.1% yoy to RON 41.9 bln (EUR 8.64 bln) as of September 20, 2020, supported by both the retail and corporate segments. In the first nine months, BCR granted new loans in local currency worth RON 6 billion (EUR 1.24 bln) to households (mortgage and unsecured consumer) and micro-businesses. The new loans to corporate clients amounted to over RON 5.7 billion (EUR 1.18 bln), of which half were investment loans.

The bank accelerated its digitalization in the context of the COVID-19 pandemic. Thus, its online banking service – George – reached over 1 million unique active users, up by 60% compared to the first nine months of 2019. The number of digital transactions in George increased by 112% yoy in the same period.

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