BRD announces 285 million-euro nine-month net profit

The growth is slower than the 43% recorded in the first nine months of 2007. The slowdown of the profit dynamics became visible six months into the year, when the profit went up by 23% compared with 32% during the same period of 2007, which reflects the worsening conditions on the market.

The total assets of the bank stood at 11.9 billion euros at the end of September, an increase of some 19% on the first nine months of 2007. The growth in RON revolved around 32%.

“The growth is carefully calibrated based on the application of strict risk monitoring principles in a relatively difficult market context,” said Patrick Gelin, BRD’s chairman. He noted as early as this summer that the banking market had started to see conditions worsening and competition rising. The profit trend reflects the slowdown of lending growth, which reached 32% compared with 42% a year ago. At the same time, deposits went up by 25%, compared with 36% in September 2007.

The return on equity remains relatively stable, at 33% without taking into account the profit derived from the sale of Asiban, compared with 34.9% a year ago. BRD continued to exercise a strict cost control and registered a 44% cost/revenue ratio. Representatives for the bank say that this level reflects the strict management given the less favourable economic environment. As for the net risk cost, they added that it maintained “at a very low level”, but failed to specify an exact figure. It was slightly up after six months, at 103 points.

BRD follows in the footsteps of Banca Transilvania, which in turn published its nine-month results early to prove that the collapse of the share prices on the stock exchange had nothing to do with the business of the two lenders. The price of BRD shares went up by almost 15% yesterday, amid a general rebound of the banking sector on the capital market.

BRD ended the first nine months with a gross operating income worth 331 million euros, an increase of 23% compared with the end of September 2007, excluding the contribution of the sale of the stake in Asiban.

“The solid growth at the end of the first nine months is because of the enforcement of an adequate commercial policy both on the retail and corporate market,” Patrick Gelin said.

He added that the solidity of the bank was confirmed by Fitch rating agency, which reaffirmed its A minus rating for BRD at the end of last week.

At the end of September, the bank had about 2.6 million clients and a portfolio of more than 2.3 million cards.

The territorial network came close to 900 branches. ING Bank Romania analysts believe BRD’s results are good news, even though the slowdown in the growth of the business is obvious.