SocGen’s Romanian subsidiary posts lower profit amid Covid-19 provision
BRD-SocGen, the third-biggest bank in Romania by assets, reported a group level (consolidated) net profit of RON 241 million (EUR 50 mln) in the first quarter of the year (Q1), down 20% compared to the same period of 2019.
The bank's standalone bottom line was RON 233 mln (EUR 48 mln), 19.3% down from last year, as the cost of risk increased after the recognition of a provision in the context of the COVID-19 crisis.
The risk costs took RON 60 mln (EUR 12.4 mln) out of the bank's profit versus a positive contribution of RON 26 mln (EUR 5.6 mln) from provisions in the first quarter last year.
BRD-SocGen booked in Q1 a EUR 25 mln provision related to the negative economic impact of COVID-19.
Otherwise, BRD Group registered a quasi-stable operational performance, the bank's report shows. BRD Group's net banking income was down 2.2% in the first three months of 2020 versus the same period of the last year, mainly due to lower fees and commissions and other revenues categories, despite a still strong net interest income growth.
The net interest income increased by 6.6% year-on-year on rising volumes, favorable structure shifts, and higher yields on bonds portfolio.
The quality of the loan portfolio further improved, as shown by the continued decline in NPL ratio (under EBA definition) to 3.3% at the end of March 2020 versus 4.0% in March 2019.
The Group's total assets at the end of March amounted to RON 58.9 bln (EUR 12.1 bln), increasing by 5.2% compared to the same moment last year. The balance of net loans increased by 2.4% year-on-year to RON 31.3 bln (EUR 6.45 bln).