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Last year, the Romanian Commercial Bank (BCR) posted a net profit of over 1.202 billion lei (258 million euro), up 80pct from the previous year, when it reported 668.1 million lei according to data released by BCR on Thursday.
According to a press release sent to AGRPRES, the net interest income increased by 16%, to 2,047 billion lei (439,9 million euro), from 1,764 billion lei (386,2 million euro) in 2017, due to the rise in market interest rates, and higher volumes of current loans and accounts.
"2018 was a year of consolidation of the strategic partnerships developed with our clients, in which we continued to support the Romanian and multinational companies that created added value in the economy. We have been more flexible and we have streamlined processes, and we will continue the same trend this year. I thank customers for the courage to believe in a prosperous Romania and thank my colleagues for reinventing themselves every day. We have shown that we are a trustworthy partner for both the private and the government, where we have played an important role in all strategic projects, such as First Home or Start-up Nation," said BCR CEO Sergiu Manea.
He pointed out that since the end of 2018, the activity is carried out "in a more unpredictable economic context than ever", the main cause being Ordinance 114, which targets the banking asset tax.
"Unfortunately, since the end of 2018, we are working in an economic context more unpredictable than ever before. The direction we are currently heading for can greatly influence future generations, and we need to sit down at the table and rationally analyze what works and what doesn't. The recent history shows that sectoral taxes do not help the savings that apply it and create distrust," says Manea.
The net commission income has advanced by 0.9pct to 706.8 million lei (151.9 million euro), from 700.7 million lei (153.4 million euro) in 2017 due to higher maintenance revenues, as well as due to the transactions with and without cash. Net trading result increased by 26pct, to 446.8 million lei (96 million euro), from 354.7 million lei (77.6 million euro) in 2017.
"General administrative expenses in 2018 reached 1,650 billion lei (354.6 million euro), 6.9pct higher, compared to 1.544 billion lei (338 million euro) in 2017, being affected by the higher staff expenditures, seasonal and marketing expenses. Consequently, the cost-income ratio was 50.2pct in 2018, as compared to 53.5pct in 2017," according to the BCR release.
The risk costs were higher in 2018 as compared to the previous year (121.2 million lei versus 32.4 million lei) due to the constitution of higher provisions registered in 2018.
The rate of non-performing loans (NPL) declined to 5.8pct on 31 December 2018, compared with 8.1pct in December 2017, as a result of the good results of the non-performing loans recovery and the transition to IFRS9. The coverage level of provisions was 100.3pct at the end of 2018.
Regarding the solvency ratio under the Capital Requirements Regulation (CRR), only the bank in December 2018 was at 21pct, significantly above the mandatory requirements of the National Bank of Romania. Furthermore, the Tier 1+2 capital ratio of 19.6pct (BCR Group) in December 2018 shows clearly the strong adequacy of the BCR capital and its continued support by Erste Group. In this respect, BCR further enjoys one of the most solid capital and financing positions among the Romanian banks.
"BCR continues to maintain its high solvency ratio, proving its capacity and commitment to supporting credit growth both in the retail business line and in the corporate business line, thus enhancing the ability to generate significant revenue from its core business," the BCR representatives say.
Loans and advances to customers increased by 8.7pct to 36,400 billion lei (7,805 billion euro) on 31 December 2018, from 33.490 billion lei (7.189 billion euro) on 31 December 2017, mainly due to sustained growth in retail loans, while the stock of corporate loans rose marginally.
Customer deposits grew by 5pct to 55.099 billion lei (11.814 billion lei) on 31 December 2018, compared to 52.496 billion lei (11.268 billion euro) on 31 December 2017, with the growth engine being the retail deposits.
According to the release sent to AGERPRES, BCR approved new corporate loans (credit facilities, letters of guarantee / letters of credit, trade finance facilities) worth 7.1 billion lei (1.5 billion euro) for activities which created thousands of jobs and generated new investment or expansion of production capacities. Major sectors such as manufacturing (mainly automotive), agriculture, healthcare and IT have been funded.
"BCR has acted as a trustworthy partner for local entrepreneurs, so that the total stock of funding for small and medium-sized enterprises (SMEs), which also includes the leasing activity, recorded a 15pct increase over 2017, exceeding 5.4 billions of lei (1.2 billion euro)," the press release shows.
In retail banking, BCR generated total new loans, granted in the local currency to individuals and micro-enterprises, of over 8 billion lei (1.7 billion euro) in 2018, due to the increase, as compared to 2017, by 50pct of the sales of "Divers" personal loans and a threefold increase in sales for "Casa Mea" real estate credit.
BCR has strengthened its position as the main banking partner for Romanians who want to buy a house, with a market share of over 22pct of the 2018 real estate loans.
"The Romanian Commercial Bank (BCR) has financed the purchase of more than 13,000 dwellings in 2018, so one in five Romanians who purchased a mortgage was financed by the bank. BCR is the largest investor in the First House government program loans worth more than 1.3 billion lei," the BCR release says.
According to the cited source, sales for micro-enterprises increased by 32pct compared to 2017, supported by newly launched products and by the fact that BCR is an important investor in the Start-Up Nation government program. Sales were also boosted by the launch in the second half of 2018 of the BCR Immediat financing solution dedicated to companies with a turnover ranging between 1 and 3 million euro.
The co-financing of projects developed with European funds has increased over the past year, BCR having a significant market share and a total co-financing portfolio of 1.84 billion euro. The largest share of funding went to infrastructure, rural and regional development projects.
Last year, BCR introduced Romania in the Guinness World Records Book, making the biggest financial education lesson through the School of Money program for 13,230 Romanians from all over the country simultaneously. In 2018, more than 110,000 people attended the financial education lessons supported by over 1,000 teachers.
The bank launched in September the smart banking platform George, which reached 300,000 users at the end of 2018. The introduction of George was one of the engines for the growth of the digital retail transactions, which increased by 36pct to 14 million .
BCR offers the full range of financial products and services through a network of 21 business centers and 20 mobile offices dedicated to companies and 509 retail outlets located in most cities across the country with over 10,000 inhabitants.
