Investors correctly anticipate bank profits

The preliminary financial results reported by the banks listed on the stock exchange have generally been anticipated correctly by the trend of the stockse price on the capital market.
The profit reported by BRD Groupe Societe Generale, the largest bank listed on the stock exchange, has beaten all expectations and generated new surges in the price of the bankes shares. However, the profit reported by Banca Carpatica, whose growth was below the average pace registered in the banking system last year, generated dissatisfaction among investors causing, after the financial results were posted, the price of the bankes shares on the stock market to fall.
BRD, the second-largest bank in the system, managed to exceed the analystse forecasts as well as estimates made by the bankes management at the beginning of last year, reporting net profit worth 656 million RON (approximately 186 million euros), up 19% in nominal terms compared with 2005.
The increase occurred especially in the last quarter, when the bank reported profit worth 180 million RON (51.5 million euros), up 71% compared with the corresponding period in 2005.
The investors anticipated the increase in BRDes profit in the last part of the year, as the bankes shares had witnessed a significant increase from the beginning of the year and reached new record high levels. The upturn was also maintained after the financial results were reported. In fact, the BRD shares have seen the most significant surge this year, namely 22%.
“The good results reported by BRD had been anticipated by the investors on the stock exchange, and prompted the price of the bankes shares to rise, in particular before the financial results were reported,” stated Alin Brendea, trading manager with the brokerage firm Prime Transaction.
As for Banca Transilvania, the financial results generated no visible effect on the market. Although the Cluj-based bank reported the biggest quarterly profit in its history, the value of the bankes shares became stable over the last quarter.