BRD Groupe Societe Generale, the second-largest bank in Romania in terms of assets, yesterday announced a 150 million RON (42 million euros) net profit for the first quarter, an increase of 3.2% from the same time last year. The profit growth in euros amounts to 7.4%.
The results published by the bank yesterday show a sudden slump in the growth of profits, after BRD had posted a 56% increase of consolidated net profit last year from 2004.
The bank also witnessed a slowdown in terms of assets, which went up by 5% in RON (10% in euros) in the first quarter, reaching 20.2 billion RON (5.74 billion euros) at the end of March. Last year, the bank had managed to post a 65% increase in assets, boosting its market share in the banking system.
The bank”s results are significantly lower than expected by Stock Exchange analysts. A poll conducted by the See-News.com website had the five analysts canvassed point to an 18% rise in profit for the first three months on the average, and a 13.6% increase in the value of assets.
Moreover, another bank of the same size as BRD, Raiffeisen Bank, announced a slight decline in assets in the first quarter, of 0.3%, according to a report of the majority shareholder, Raiffeisen International.
The deposits attracted by the bank amounted to 15 billion RON (4.2 billion euros) at the end of March, an increase of 63% from the same time last year. The loans granted had reached 11 billion RON (3.1 billion euros) by the same date.
The bank continued its strategy to focus on the retail sector, offering loans to individual customers that now account for 44% of the total number of loans issued. Corporate lending increased by 35% over the last four quarters, while loans for individuals, and especially the consumer loans, progressed by 98%.
According to the NBR data, the bank had a 15% market share at the end of last year, up from the 14.2% achieved in midyear. BRD chairman Patrick Gelin says the bank had to face fierce competition on the retail market, but managed to stay competitive nonetheless.
“The bank continued to maintain a high pace of growth on both markets (retail and corporate i.e.), particularly focusing on the retail market, where it managed to maintain its competitiveness despite fierce competition,” Gelin stated. He added the results “are within the parameters we anticipated.”
BRD set out to attain a 5-10% growth of the net profit as a result of an increase by 5% in the deposits attracted and by 55% of the credits granted. The bank”s goals also include a continued increase in lending on the retail segment.
According to Gelin, the bank will proceed with its development policy in terms of product and services range, and in terms of branch network.
Return on equity amounted to 35% in the first three months, say the representatives of the bank, down 3% from last year”s ROE.
At the end of March, BRD had a network of over 360 branches and more than 1.8 million clients for individuals and legal entities.