BCR president thinks banking system will turn to loss this year, situation worse in autumn

The Romanian banking system is most likely to end 2010 posting a loss, believes Dominic Bruynseels, executive president of BCR (in picture), the biggest bank on the Romanian market. “It is pretty possible to end on loss due to the pressure we've been discussing, according to RAS (the local accounting standards),” said Bruynseels when asked whether he thinks the banking system will post a loss this year. The local banking system posted a loss in the first half of this year, according to data supplied by the Romanian Central Bank (BNR). BCR grew its operational profit, and if provisions will drop, the bank will have a very good position in terms of net profit, says Bruynseels. “I think when people will come back from the holiday, in September, we will see a worsening of the situation. I anticipate there will be difficulties in September, October, November. The results will be worse and we will make extra provisions,” he went on. He doesn't expects provisions to decrease until the second half of next year. The situation of the bank's retail portfolio was beginning to improve, before the Government announcement about the state clerks' salary cut, after which it started deteriorating again. However, the biggest problem will be on the corporate side, “Some small and medium enterprises have been suffering for a while and will reach the end of the road. I think we could expect a worse situation in the second half of the year,” he said.