Romania's BRD Groupe Societe Generale ends 2012 on loss after increase in cost of risk

Romanian lender BRD, owned by French Societe Generale, ended 2012 with a loss of EUR 74.6 million, mostly caused by an increase in provisions. “Our performance last year was affected by the increase in cost of risk, given the tough environment. The solidity of our business model is not questioned and we have clear strategic plans for 2013 and the following years,” said Philippe Lhotte, president-director of BRD-Groupe Societe Generale. The cost of risk was up by a staggering 61 percent, to around EUR 435 million, which was due to the deterioration of the macroeconomic environment and a more prudent methodology, according to the bank. The bank's net revenues from banking activities was 6.1 percent down on 2011, to some EUR 654 million, with the drop mainly triggered by the decrease in the interest margins. BRD however reduced its spending by 2.4 percent in 2012 to some EUR 304 million. BRD-Groupe Societe Generale's assets were of EUR 10.7 billion at the end of 2012. Deposits were up by 4.1 percent, and the ratio between loans and deposits moved from 103 to 98.7 percent, according to the bank. On the loans side however, the activity slowed down, with a 1.5 percent drop in loans for individuals. The lending activity was mainly fueled by real estate loans and corporate clients, even though many companies limited their investments, which had a negative impact on lending, according to the bank. “The bank had to work during a still difficult environment in 2012, with a lack of trust which affected consumption, weak external demand which affected exports and a weak performance of the agricultural sector, with crops below average,” according to BRD Groupe Societe Generale. BRD, one of the blue chips on the Bucharest Stock Exchange, had 2.3 million clients and over 2.2 million valid cards end – 2012, together with 1,500 ATMs and 21,000 POS. French banking group Societe Generale owns 60.16 percent in the bank. Other shareholders are the five SIFs, and the Fondul Proprietatea, each with share packages of up to 5 percent. editor@romania-insider.com