Romania's largest lender BCR posts flat net profit but sees provisions shrinking

Romanian lender BCR, majority owned by Austrian Erste Bank, ended the first half of this year with a net profit of EUR 126 million, close to the profit in the same period of 2012. The lender's assets declined by 4.9 percent over this period, to some EUR 15.6 billion end of June 2013, but BCR was still the largest bank in Romania assets wise. “The first half of the year confirmed that declining risk costs are driving our return to profitability. Furthermore we are pleased to see strong positive effects of the restructuring program on our operational performance. BCR’s current capital and liquidity position is a good base to continue financing growth opportunities arising from Romania’s improving economic performance”, said Bernd Mittermair, Chief Financial Officer of BCR. The group's provisions for loans and advances went down by as much as 37.8 percent during the first six months, to some EUR 250 million, but the non-performing loans ratio rose to 29 percent 'due to contraction of the loan book'. Loans were down in volume by 4.3 percent, to some EUR 11.4 billion, while deposits were also on a downwards path, with a 3.2 percent drop, to some EUR 8.2 billion. “Customer deposits remain BCR’s main funding source, while the bank enjoys strong support from its parent bank, at the same time benefiting from diversified funding sources and agreements with other International Financial Institutions,” according to BCR. editor@romania-insider.com (photo source: Romania-Insider.com)