Romanian Development Bank posts moderate growth

The Romanian Development Bank (BRD)-Groupe SociA©tA© GA©nA©rale, Romania’s second-largest bank, last year saw moderate growth for its main financial indicators.
Net profit, expressed in ROL and recorded in accordance with the IAS-NBR standards, amounted to 2,249 billion ROL last year, up 15.3% since 2001. If calculated in dollars (according to the exchange rate valid at the end of last year), net profit stood at $67.1 million, up 8.5% as compared to the $61.7 million in 2001.
“The results posted by BRD last year were satisfactory. I shall not refer now to the economic conditions in 2002, but I can tell you that our operations were significantly influenced by three factors. First of all, legislative constraints, such as the minimal compulsory reserves or the accounting effects of the shift to the international accounting standards (IAS), which imposed costs of 213 billion ROL on the bank, more than 10% of the net result. Second, banking competition was very fierce. We refused to enter the war of prices at any costs. Then, there were the investments we made. They amounted to 1,414bn ROL (some $40m) last year alone. Since we took over BRD, SociA©tA© GA©nA©rale has invested more than 5,000 billion ROL,” Patrick Gelin, BRD-SocGen general manager said yesterday.
If the euro is considered, given last year’s significant increase posted by the single European currency, BRD ended 2002 with smaller net profit than in 2001, namely a drop from 69.9 million euros in 2001 to 64.4 million euros last year.
The bank’s total assets stood at 64,000 billion ROL on December 31, 2002, up from 54,000 billion ROL at the end of 2001.
BRD’s market share has dropped in the case of companies and population deposits, as the bank did not join the “war of prices” promoted by the small banks, which accept losses in order to gain new customers, Patrick Gelin said.
In the case of natural persons, BRD last year had 18.4% market share for deposits and 38.3% for credits. In the case of deposits, the bank’s market share lost two percentage points as compared to 2001. Deposits of natural persons amounted to 26,277 billion ROL, while loans granted to the population reached 4,989 billion ROL.”
“Many banks with a 2-4% share of the system aim to expand their market share and that is why they accept big expenses and even temporary losses in order to reach this target,” BRD president Bogdan Baltazar explained.
oana.nuta@zf.ro