Rising borrowing costs eat into Banca Românească's profit

Banca Românească, the domestic subsidiary of National Bank of Greece (NBG) Greek financial group, in the second quarter derived net income worth 2m euros, less than half the gain posted in the similar period of 2009, as it had to pay more to get funding. Moreover, provision expenses stayed at a high level.
In the first quarter, the bank had reached 12m-euro profit. Owing to the better first quarter figure, Banca Românească ended the first half with 14m-euro profit, up 12% from the first half of 2009, according to the data NBG published in Athens.
“The second quarter income is much lower than the one reached in the first three months of the year because of the adverse international and domestic conditions, which translated into an increase of funding costs by at least 100 basis points,” bank’s management says.
Outlooks for the second half of the year are moderate as economic activity is not picking up.
“We’re not expecting significant profitability changes in the second half of the year, given the domestic and international economic climate,” states the bank’s management.
Thus, quarterly profit is likely to remain in the two-three million euro-range.