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“BCR posted a net profit of 845.8 million lei (175.2 million euros) in the first 9 months of 2020, compared to 348.8 million lei (73.6 million euros) in the first 9 months of 2019 based on a higher operating result and a significant advance in new loans, partially offset by higher risk costs Net income in 2019 was affected by the constitution of an exceptional provision related to the activity of the BCR Banca pentru Locuțe in the second quarter of 2019 ”, the statement said.
The Bank notes that the operating result improved by 6.6% to 1,403 million lei (290.8 million euros) in the first 9 months of 2020, from 1,317 million lei (278 million euros) in the first 9 months of 2019, in a context of higher operating income and lower operating expenses.
Net interest income increased 5.7% to 1,778 million lei (368.5 million euros) in the first 9 months of 2020, from 1,683 million lei (355.2 million euros) in the first 9 months. As of 2019, favored by higher loan volumes in both the retail and corporate customer segments, partially offset by the impact of lower interest rates in the money market.
According to the statement, net fee income decreased by 13.3% to 501.7 million lei (103.9 million euros) in the first 9 months of 2020, from 578.9 million lei (122.2 million of euros). in the first 9 months of 2019, due to a lower volume of cash withdrawal charges and the elimination of the ATM withdrawal fee other than those of the BCR in April and May, as a support measure during the emergency.
Net trading profit increased by 2.2% to 256.7 million lei (53.2 million euros) in the first 9 months of 2020, from 251.1 million lei (53 million euros) in the first nine months of 2019, mainly due to increased commercial activity.
Furthermore, the net trading result increased by 2.2% to 256.7 million lei (53.2 million euros) in the first 9 months of 2020, from 251.1 million lei (53.0 million euro) in the first nine months of 2019, mainly due to increased commercial activity.
Operating income rose 1.2% to 2,618.5 million lei (542.5 million euros) in the first 9 months of 2020, from 2,587.4 million lei (546 million euros) in the first nine months. of 2019, determined by higher net interest income and net trading income, partially offset by lower net commission income.
General administration expenses in the first 9 months of 2020 amounted to 1,214,800 million lei (251.7 million euros), 4.3% less compared to 1,270 million lei (268.0 million euros ). in the first nine months of 2019, mainly due to a lower annual contribution to the deposit guarantee fund in 2020 compared to 2019 and lower depreciation, partially offset by higher personnel costs and new headquarters in 2020.
Thus, the cost-income ratio improved to 46.4% in the first 9 months of 2020, compared to 49.1% in the first nine months of 2019.
According to the document, the net result of the depreciation of financial instruments registered an allocation of 277.5 million lei (57.5 million euros) in the first 9 months of 2020, compared to a release of provision of 122.8 million lei (25 .9 million) in the first nine months of 2019. This result was mainly influenced by the updating of the risk parameters to reflect the anticipated economic recession, as well as by the implementation of stricter rules on the risk classification of credit. in accordance with IFRS 9, applicable to exposures to clients affected by the current situation.
The Bank states that the NPL ratio reached 4.4% in September 2020, slightly higher than 4.1% in December 2019. This evolution reflects the effect of a single event consisting of an exposure to a high-end corporate client value. NPLs, recorded in the second quarter of 2020, after a long period with almost no accumulation of new NPLs and in a context of continuous recoveries in both the retail and corporate segments. At the same time, the coverage of the past due portfolio with provisions reached 119.6% in September 2020.
The solvency ratio of the BCR (bank only) according to the regulations on capital requirements (CRR), bank only, stood at 21.4% in August 2020, well above the requirements of the National Bank of Romania . Furthermore, the rank 1 + 2 capital rate of 20.5% (BCR Group) in June 2020 clearly shows the strong capital adequacy of BCR and its continued support from the Erste Group. In this sense, the BCR continues to enjoy one of the strongest capital and financing positions among Romanian banks.
Loans and advances to clients increased 4.7% to 41,935 million lei (8,606 million euros) as of September 30, 2020 from 40,049 million lei (8,333 million euros) as of December 31, 2019, supported by increases both in retail credit (+ 6.8% compared to December 2019) and in corporate credit (+ 2.4% compared to December 2019).
Customer deposits increased 5.2% to 60,796 million lei (12,477 million euros) on September 30, 2020 from 57,791 million lei (12,082 million euros) as of December 31, 2019, supported by increases in both retail deposits (+ 6.1% compared to December 2019) and corporate deposits (+ 1.5% compared to December 2019).
According to the statement, in the retail credit activity, the BCR granted new loans in local currency for individuals and micro-enterprises for 6 billion lei in the first 9 months of 2020, mainly for mortgages and personal loans.
Sales of personal loans decreased 4.4% year-on-year in the first 9 months of 2020, but increased 50% in the third quarter compared to the second quarter, partially recovering from the setback caused by the closing of the economy in the second quarter. from 2020 in the context of the pandemic. Mortgage sales rose sharply 38% year-on-year in the first 9 months of 2020 due entirely to the standard mortgage product, while the state-guaranteed mortgage product fell year-on-year due to the late approval of new terms. New loans to microenterprises decreased 12.4% year-on-year in the first 9 months of 2020, but increased 69% in the third quarter compared to the second quarter.
In the corporate lending activity, the BCR (only bank) approved new corporate loans for 5.7 billion lei in the first 9 months of 2020. The stock of financing granted to the SME sector (including through the subsidiary BCR Leasing) increased by 12.5% per annum, reaching the value of 6.7 billion lei (1.4 billion euros) as of September 30, 2020, as a result of a greater focus on new businesses and the development of the leasing sector, as well as Participation of the BCR in the SME Invest program. Public sector financing has increased by 16% year-on-year. The real estate segment increased 14.5% year-on-year as a result of fundraising for office projects and commercial spaces financed in the last year.
George’s smart banking platform has reached one million users, 60% more than in the first half of 2019. The number of transactions through George has increased by 112% in the first nine months of 2020 compared to the same period of 2019. Nine out of ten users use mobile variant. Foreign currency accounts increased more than 200% in the first 9 months of 2020 compared to the same period last year. George Moneyback, the loyalty program that offers cash-back discounts to customers using card payment, has reached 230,000 users in just three months.
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