Provisions bite into Banca Românească profit

National Bank of Greece financial group, the majority shareholder in Banca Românească, reported 12m-euro profit for Romanian operations in 2010, down 37% from the 2009 profit.

Provision pressure was most heavily felt in the second half of the year, after profit already reached 12m euros in first half, up 20% from the same period of 2009. The third quarter had a contribution of just 1m euros to profit. In the fourth quarter, the bank set up 16m-euro provisions, topping operating income, meaning the net figure was a loss. Thus, net income reported for the entire year was 1m euros smaller than the one reported after the first nine months, of 13m euros.

As a matter of fact, operating income was 7% lower last year, 59m euros. The main cause was the 14% lower net interest income, to 102m euros. Fee income leapt to 27m euros, but it was not enough to offset the falling interest revenues.