Romania’s second largest lender BRD, part of French group Societe Generale, returned to profit in 2014, after two years of losses. BRD made a net profit of EUR 9.7 million, compared to losses of EUR 87 million in 2013, according to the bank’s preliminary results.

“2014 marked a turning point for BRD, as the bank returned to profit and managed to improve its risk profile and its operational efficiency,” said Philippe Lhotte, BRD’s president and general manager.

The improved profitability was mainly due to lower risk costs. BRD reduced its net risk costs by 43%, to EUR 268 million. The bank also managed to reduce its operating costs by almost 3%, to EUR 282 million.

The bank reduced the share of non-performing loans in its portfolio, from almost 25% at the end of 2013, to just above 20%, at the end of 2014. This was mainly possible due to the disposal of non-performing assets from its portfolio.

At the same time, BRD’s total loan portfolio went down by 7.6%, to EUR 6.95 billion. Net loans also declined by 4.7%, to EUR 5.95 billion, which negatively impacted its operational revenues. Deposits were almost flat, at EUR 8.1 billion, mainly supported by individuals.

“With net loans to deposits ratio reaching 73.4% at end 2014, BRD re-affirmed its solid financial position and reinforced its degree of financial autonomy. Consequently, the bank can significantly develop its loan portfolio as soon as demand recovers,” the bank’s representatives said in a report to shareholders.

BRD’s shareholders’ equity went up by 6.4% to EUR 1.23 billion.

BRD’s shares float on the Bucharest Stock Exchange. In the last three months, the shares gained about 25%. The bank is currently valued at some EUR 1.53 billion (as of February 12, 2015).

Andrei Chirileasa, andrei@romania-insider.com