Romanian lender BCR announces loss for first half of 2012 on higher provisioning

Banca Comerciala Romana's (BCR) result for the first half of the year show falls across the board. The bank recorded net losses to the tune of EUR 124.9 million for the first half of 2012, while January and June last year BCR saw a net profit of EUR 37.8 million. The loss was mainly triggered by provisioning, according to the bank.

The net charge with risk provisions for loans and advances totalled EUR 401 million, which led to an increase in the non-performing loans coverage ratio from 50 percent end 2011 to 53.7 percent in June 2012. It reflects the impact of the continuing weak performance of the Romanian economy on BCR’s corporate customers according to BCR. Non-performing loans covered around a quarter of BCR's total loan portfolio at end June. Operating performance was down 2.4 percent in 2012's second quarter against Q1. Operating income declined by 4.4 percent in Q2 versus Q1 2012 and by 5 percent in the first half of this year compared to the the first half of 2011. The bank's total assets shrank by 0.5 percent between January and June 30, to EUR 17.1 billion, but BCR's market share remains at around the 20 percent level. Loans to consumers were up 2.3 percent, to EUR 12.3 billion, mainly due to retail lending, while the volume of deposits was slightly down, at EUR 8.8 billion, from EUR 9.1 billion at end-2011. "Customer deposits remain the main BCR funding source, the bank also enjoying a strong support from its parent bank," according to the bank's statement. “We shall make each and every effort to reverse these disappointing results. In this spirit we have already executed measures and shall continue to do so in the second half of this year,” said BCR CEO Tomas Spurny. Austrian Erste Group owns a controlling stake in BCR. Liam Lever, liam@romania-insider.com (photo source: BCR)