Below stated data are un-audited, consolidated business results of Banca Comerciala Romana (BCR) as of 30 June 2007 according to IFRS, said the bank in a statement (see the attached document)
Unless otherwise stated, the H1 2007 figures are compared to the figures as of 30 June 2006 (P&L-positions) or the end of 2006 (B/S-positions). Also, if not stated otherwise, foreign exchange rates used for conversion of figures into EURO are the ones provided by the European Central Bank. The income statement is converted using the average exchange rate for the 3.33 RON/EUR, while the balance sheet is converted using the closing (3.13 RON/EUR) exchange rate.
I. FINANCIAL HIGHLIGHTS FOR THE BCR GROUP:
• Net interest income rose by 12.2% from RON 786.2 million (EUR 221.5 million) to RON 882.2 million (EUR 264.9 million)
• Net commission income climbed by 36.3% from RON 257.1 million (EUR 72.4 million) to RON 350.4 million (EUR 105.2 million)
• Operating income increased by 23.3% from RON 1,176.1 million (EUR 331.3 million) to RON 1,450 million (EUR 435.4 million)
• General administrative expenses rose by 19.5% from RON 655.2 million (EUR 184.6 million) to RON 783.1 million (EUR 235.2 million)
• Pre Tax Profit rose by 22.4% from RON 452.7 million (EUR 127.5 million) to RON 554.0 million (EUR 166.3 million)
• Net profit after taxes and minority interests increased by 21.4% from RON 382.8 million (EUR 107.8 million) to RON 464.6 million (EUR 139.5 million)
• Cost-income ratio improved from 55.7% in financial year 2006 to 54.0%
• Return on equity increased from 18.8% in financial year 2006 to 21.2%
• Total assets increased by 5.8% from RON 47,435.8 million (EUR 14,034.2 million) as at 31 December 2006 to RON 50,165.1 million (EUR 16,027.2 million)
“BCR is successfully facing the challenge of implementing its new organization concepts and of adapting its policies to the new business environment requirements, by simplifying and increasing our effectiveness in developing partnerships with our clients”, commented Nicolae Danila, CEO of Banca Comerciala Romana.
“While accelerating the process of integration into Erste Bank Group we succeeded to achieve very good results in line with our H1 2007 set objectives and, furthermore, in developing our business portfolio. I am confident that we will continue to strengthen our position on the Romanian market, by reaching our objectives set for 2007 and by enhancing our capacity to create value to the benefit of our shareholders, clients and employees” added Nicolae Danila.
II. BUSINESS PERFORMANCE OVERVIEW FOR THE GROUP
With the 23.3% rise in BCR Group’s operating income significantly exceeding the 19.5% increase in general administrative expenses, the operating result strongly increased by 28.0% from RON 520.8 million to RON 666.8 million.
The main driver of this improvement was the BCR Group’s strong increase in loans to customers (loans before provisions went up by 14.3%) generating a good increase in net interest income (+12.2%) and respectively in Net commission income (+36.3%).
The operating expenses went up by 19.5%, the increase being mainly due to substantial network expansion by 34 branches in H1 2007.
The requirement for credit risk provisioning increased by 10.3% to RON 875.9 million; the actual level of provisions is in line with the quality and structure of loan portfolio.
The consolidated net profit after taxes and minority interests increased by 21.4% to RON 464.6 million (EUR 139.5 million), to reach the highest level in the history of the BCR Group.
Return on equity increased to 21.2% from 18.8%.
Due to the operating income increase the cost/income ratio improved to 54.0% from 55.7%.
Total assets increased by 5.8% from RON 47,435.8 million (EUR 14,034.2 million) as at 31 December 2006 to RON 50,165.1 million (EUR 16,027.2 million) as of H1 2007. This included increases of 14.3% in loans and advances to customers (before provisions) and 2.1% in amounts owed to customers respectively.
III. BUSINESS ACTIVITIES INDICATORS
(BCR bank stand alone)
H1 2007 saw an excellent overall loan growth. The volume of aggregate Loans to customer portfolio (before provisions) increased by 14.8% from RON 24,570.6 million (EUR 7,269.4 million) as at 31 December 2006 to RON 28,208.8 million (EUR 9,012.4 million)
As regards the lending activity, three major aspects need to be outlined:
– Retail loans, amounting to an outstanding value of RON 11,793.8 million (over EUR 3,768.0 million), were BCR’s most dynamic placement in H1 2007, with an increase YTD of 19.4%; this result is due primarily to consumer loans, which increased by over 21%.
– The bank targeted long term financing, encouraging the customers’ investment decisions, M<L reaching to weight about 76% of the loan portfolio;
– Loans in domestic currency are predominant in BCR portfolio – 58.4% of total loans – above the market average.
Corporate Loan portfolio (unconsolidated) increased YTD by 11.7% to RON 16,415.0 million (EUR 5,244.4 million). This growth was driven mainly by SMEs sector.
Deposits from customers increased YTD by 2.6% to RON 25,122.3 million (EUR 8,026.3 million) from RON 24,477.1 million (EUR 7,241.7 million) as at 31 December 2006. Retail deposits continued to grow (YTD by 15.0% to RON 13,417.2 million). Corporate deposits had a slight decrease by 6.5% down to RON 11,705 million (EUR 3,739.6 million).
The loan/deposit ratio saw a significant increase, up to 112.3% as at 30 June 2007 from 100.4% at year-end 2006 due to the faster increase in lending than in savings.
BCR continued to consolidate its leading position on the debit and credit cards market reaching a total of 2.3 million active cards (app.14.64 % YOY increase).
The number of active debit cards was 2.12 million, which is a 12.81 % increase compared to the H1 2006. Credit cards are becoming more and more popular: the number of active BCR credit cards increased by 41.66 % compared to H1 2006, up to more than 180,500. BCR continued to expand its ATM network to 1387 units (16.94% YOY increase) and POS network up to 11481 units (58.18% YOY increase).
Moreover, BCR’s network was extended in H1 2007 by opening 34 new branches, reaching to a network of 506 outlets as of end-June, while the number of employees decreased by 2.1% against Dec 07 to 10,876 employees.
