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The second largest Romanian bank in Romania, in terms of assets, "BRD - Groupe Société Générale", posted a profit of 425 million lei in H1 2009, down 17.4% YOY, from 515 million lei, according to a press release issued yesterday by the company.
Patrick Gelin, President & Chief Executive Officer of BRD SocGen, feels that the first semester of 2009 features a "sizeable slowdown in loan demand and heightened risk increase, for individual customers as well as for SMEs".
Still, he added that due to the efficiency of the bank"s internal procedures, the steps taken for cutting overall expenses and to improve the quality of its portfolio, BRD has proven its ability to weather a difficult environment.
The return on equity (ROE) was 22.3% at the end of H1, whereas the cost/earnings ratio remained stable at 43.8 %.
The net banking revenue (from interest rates, commissions and financial operations) reached 1.63 billion lei (387 million Euros), up over 17% over H1 2008, and gross operating profit increased 19.4% YOY to 919 million lei.
According to brokers, the results of BRD beat estimates, with speculators anticipating by a few weeks an increase in profits thus causing the share price to rise more than 25%, to 10.5 lei/share in Monday"s trading session.
"BRD"s net profit dropped 17.4%, which was better than our expected 20% drop", said Antonela Badea, financial analyst at brokerage firm "Tradeville".
According to Mrs. Badea, even though operating profit increased over last year, the increase in non-performing loans required the creation of greater provisions, which affected the net profit.
The total revenues of the bank in the January - June period amounted to 9.55 billion lei, one third greater than H1 2008 revenues, whereas total expenses increased 37%, to 9.03 billion lei.
"Revenues have increased significantly, because the bank successfully increased its loan portfolio, compared to Q1 2008. Still, loans decreased 1% from the beginning of the year, with a significant increase being noticeable in the case of deposits", Mrs. Badea added.
The company granted a total of 32.2 billion lei in loans in H1 2009, up 11% YOY, of which 15.8 billion lei to individuals and 16.4 billion lei to companies. Customers" deposits amounted to 29.1 billion lei, at the end of June.
"For 2009, we estimate a net profit of 914.4 million lei, 19% lower than last year, with net banking revenues to increase 8%, up to 3.3 billion lei", Antonela Badea concluded.
According to analysts, the bank"s main advantages are its extensive network of agencies, the variety of its banking products and activity sectors, and the financial support of the main-bank Société Générale, as well as its above-average solvency ratio.
The analysts also said that weaknesses of the bank come from high overhead expenses and the fact that the loan-deposit ratio is higher than 1.
"BRD-Groupe Société Générale" is the second largest Romanian bank in terms of assets, and the seventh largest bank in terms of share capital.
Trading of shares of "BRD-Groupe Société Générale" on the Bucharest Stock Exchange began on January 15th, 2001, with the symbol BRD. The company has a share capital of 696.90 million lei, split into shares with a face value of 1 leu.
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