While the share of NPLs at Banca Comercială Română (BCR) amounted to 10.6 percent at the end of the first three quarters in 2009, BRD – Groupe Société Générale posted an NPL ratio of about eight percent.
At the end of August, according to data provided by the National Bank of Romania (BNR), the banking system registered RON 25.6 bln (some €6.05 bln) worth of loans classified as questionable and estimated loss. This means that BCR and BRD own over 29 percent of total NPLs in the banking sector.
“I believe that the level of nonperforming loans will remain at the same level by year-end. Bank provisions have a negative effect on balance sheets. Many banks in the system are externalizing their nonperforming loans, but this is not our case. Our nonperforming loans are included in reports,” the Chairman of the BRD Board, Patrick Gelin, told The Money Channel. According to the official, NPLs make up 13 percent of total loans in the local banking sector.
“Demand for loans is nonexistent at the moment, and the return thereof depends on economic direction, on growth in Western Europe economies, but also on the real estate market,” Gelin added.
When BCR’s bank results were published, its Chief Executive Officer, Dominic Bruynseels, said that “the operating result continues to have a positive evolution, but this is not sufficient to counter the increase in risk costs.”
BRD – Groupe Société Générale posted a net profit worth RON 660 million (some €156.11 mln) in the first nine months of this year, down 19 percent annually, but RON 235 mln (about €55.58 mln) higher than the result posted at the end of June. The bank’s provisions nearly tripled compared to September 2008, to RON 673 mln (approximately €159.18 mln). “Results were satisfactory, considering the constant demand for loans. There was no improvement in the past three months, only stabilization. Private lending has positively influenced profit, together with the First Home program [Ed. n. – a Boc Cabinet anti-crisis program, meant to unblock the real estate market], in which we have a very good market share, of 50 percent,” Gelin said.
BRD’s Chairman added that the impact of the exchange rate was neutral at the loan level, because the bank granted very few foreign-currency-denominated loans to individuals. Moreover, Gelin said that the risk cost at the BRD level is high, but below the average in the banking sector.
