Société Générale subsidiary, BRD,
Romania’s second-largest bank by assets, has posted a net profit of
RON501m ($158.8m) for the 12 months to 31 December, a fall of 31%
compared with the prior year.
BRD’s earnings were
significantly below consensus analyst forecasts, profitability
wise, due to higher risk costs.
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BRD underperformed the
market with total lending contracting by 1% during fiscal 2010 to
RON34.5bn while total deposits inched up by 2% to
RON298.8bn.
Despite higher
non-interest expenses than forecast, BRD successfully reduced its
cost-income ratio from 43.9% at the end of 2009 to 42.2% a year
later.
BRD also posted
sector-beating NPL (loans overdue by more than 90 days) metrics of
9.13% against the sector average of 11.85%.
BRD said that it was
expecting risk costs to be flat in the first half of 2011 and to
fall during the second half.
BRD ended 2010 with a
branch network of 937 outlets, up seven during the year.
Guy Poupet, chairman and
CEO of BRD said:
“We are approaching 2011
in full confidence, as we rely both on our strength and on the
support from our parent-company, the scenario we’re taking into
consideration indicating a moderate improvement of the economic
context.
“Nevertheless, we think
that 2011 will continue to be a difficult year, particularly in
what the high net risk cost is concerned.”
