BRD-Groupe Societe Generale 2011 Profit Falls for Third Year
Net income fell 7 percent 465 million lei ($141 million) from 501 million lei in 2010, the Bucharest-based bank said today in a filing to the capital city’s stock exchange. Net banking income, the bank’s main source of revenue, dropped 9 percent to 3.22 billion lei, the bank said.
“Even though 2011 recorded slight economic growth, it has only brought a tiny revival in the banking market,” BRD Chief Executive Officer Guy Poupet said in the statement. “Demand for products and service has remained at a low level.”
Romania’s banking industry, which is about 90 percent owned by international lenders, posted losses for a second year in 2011, as a lending boom between 2006 and 2008 ended after the worst recession on record in the country.
The banks recorded a total loss of 100 million euros ($132 million) last year, while non-performing loans stood at 14.1 percent of total lending in 2011, Nicolae Cinteza, the head of the central bank’s supervision department, said on Feb. 8.
BRD, majority owned by France’s Societe Generale SA (GLE), set aside 1.29 billion lei for bad loans last year, less than 1.56 billion lei in 2010. Bad-loan costs will decline “slowly” in 2012, Poupet told reporters in Bucharest today.
The Romanian bank won’t need a capital increase this year and will seek to sell bonds depending on market conditions as it will continue to diversify its funding sources, Poupet said.
BRD shares fell 1.3 percent to close at 11.25 lei in Bucharest trading today, valuing the bank at 7.84 billion lei.
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