BCR group's net income reaches 6 million RON in Q3

Bad loan charges, losses related to fee and treasury revenue drove the quarterly income to a five-year low.

BCR group, built around the biggest bank on market, for the third quarter of this year reported net income worth 6m RON (1.4m euros), down by more than 93% from the similar period of 2009.
The figure is calculated in line with international reporting standards, allowing for a laxer provision treatment. The bank’s retail unit in the third quarter posted losses of almost 14m euros, according to the data published by Erste Group, BCR’s parent bank.
After the first nine months, net income reached 494.5m RON (117.7m euros), down almost 30% from the same period of last year. The bank uses an average exchange rate of 4.20 RON/euro for the third quarter, although according to NBR’s calculations it stood at 4.25 RON/euro.
The third quarter figure is accounted for by the 63% higher bad loan provision expenses against June 2010, to around 1.6bn RON (373m euros).
Also, Dominic Bruynseels, BCR’s chief executive, says the bank lost around 3m euros on the elimination of the early payment fee for retail loans, while the treasury lost 17m euros through the negative impact of reassessing some RON/euro forex positions in July and September. At group level, the figure was also harmed by the 28m-euro writedown of some assets part of the balance sheet of BCR Leasing, the subsidiary with the biggest weight after the bank.
“The government’s austerity measures have a clear impact and we expect this to maintain in 2011. I do not see any significant decline in provision charges. There will probably be some deterioration in the SME and large companies’ segment during the winter and the first half of 2011,” BCR’s boss said.