Profit of UniCredit Ţiriac Bank falls 47% in Q1 2011

In Q1 2011, UniCredit Ţiriac Bank posted a net profit of 34 million lei, down 47%, over the same period of last year, according to the International Financial Reporting Standards (IFRS), the press release of the bank states.

According to the Romanian Accounting Standards (RAS), the lender turned out a profit of 52 million lei in the first three months of 2011, down 14% over Q1 2010.

The revenues of UniCredit Ţiriac Bank reached 282 million lei, in Q1 2011, down 8.8% YOY. Net revenues, from sources other than interest (such as fees and money market operations) increased 19%, and net interest revenues fell 18%, due to the low volume of economic activities, the strengthening of the leu and the impact of legislative changes, the press release states.

Operating expenses increased 4%, between January and March 2011, compared to Q1 2010, amid rising inflation and the statutory adjustments determined by the regulations in the market.

The cost/revenue ratio stood at 51%.

The bank"s assets at the end of March stood at 19 billion lei. The value of on-balance sheet loans climbed 5%, in Q1, to 13.3 billion lei, with a growth rate higher than the average of the banking system. Customers" bank deposits amounted to 8.6 billion lei.

The solvency rate stood at 12.8% according to the RAS, above the regulator required ratio. The annualized risk cost fell to 2.1% of the bank"s portfolio, and provisions accounted for 6% of the total loan portfolio, up from 4.1% one year ago.

"Even though we have continued to see growth above the market average on the lending segment and in other areas that represent priorities to us, the extended recession, the deterioration of asset quality, as well as the shrinking margin have continued to pressure the bank"s revenues. On the other hand, we are seeing encouraging signals when it comes to the reduction of the cost of covering risk, to the evolution of macroeconomic indicators and the thawing of lending, but the pace of the recovery will remain slow this year as well", said Răsvan Radu, CEO of UniCredit Ţiriac Bank, according to the press release.

The total consolidated assets of UniCredit Ţiriac Bank, UniCredit Leasing Corporation and UniCredit Consumer Financing stood at 22.1 billion lei, at the end of March. The three entities had a net consolidated profit of 30 million lei, in Q1 2011, and a share capital of 2.4 billion lei.

All the data presented above is reported according to the IFRS, unless otherwise noted.