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BRD First-Half Net Income Falls 88% on Bad-Loan Provisions

July 30 (Bloomberg) -- BRD-Groupe Societe Generale SA, Romania’s second-largest bank, said its first-half profit fell 88 percent as bad-loan provisions rose during the country’s recession.

Net income dropped to 39.4 million lei ($10.5 million) from 322.6 million lei a year earlier, the bank said in a regulatory statement today. Bad-loan costs grew 61 percent to 715 million lei in the first half.

“The net income in the first half was affected by a higher net risk cost,” the Bucharest-based bank said.

Romanian banks, which posted a second consecutive year of combined losses in 2011, have been struggling since 2009 to cut rising bad-loan costs as a second recession in three years in the Balkan country made it difficult for citizens and companies to repay loans.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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