Erste’s BCR Unit Posts Second-Quarter Loss of $65 Million
Stock Chart for Erste Group Bank AG (EBS)
Banca Comerciala Romana SA, Romania’s biggest bank by assets, said it turned to a loss in the second quarter of this year because of higher bad-loan provisions, prompting its owner to cut cost.
The bank, known as BCR and majority-owned by Vienna-based Erste Group Bank AG (EBS), posted a second-quarter net loss of 240.6 million lei ($65 million) compared with an 82 million-lei profit in the same period of 2011, it said today in an e-mailed statement. BCR has reported losses in three of the last four quarters.
“BCR Group is strongly committed to turn around our performance, from both cash and revenue perspective,” Tomas Spurny, the bank’s CEO, said in the statement. “We shall make each and every effort to reverse these disappointing results. In this spirit we have already executed measures and shall continue to do so in the second half of this year.”
Romanian banks, which recorded a cumulative loss of about 100 million euros ($123 million) in 2011, the second consecutive year of losses, continue to struggle with rising bad-loan costs and low demand for new credits as the country’s economy entered the second recession in three years in the first quarter.
BCR sees an economic growth of 1.2 percent for Romania this year, lower that the 2.5 percent increase from last year, “although the growth outlook for the second quarter looks a little perkier,” according to the statement.
The lender saw its bad-loan costs almost double from April through June to 826.6 million lei from 488.5 million lei a year earlier, according to the statement.
Erste said today it plans to cut costs at its Romanian unit by 10 percent in the next 12 to 18 months.
Total assets dropped 0.5 percent to 76.4 billion lei, the bank said. BCR’s solvency ratio stood at about 12.7 percent, more than the 10 percent requested by the Romanian Central Bank.
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