BRD, the second-largest bank on the market, posted a record-high profit of 515 million RON (140.3 million euros) in the first half of the year, up 23% against the same time in 2007, according to Romanian accounting standards. However, the profit growth rate slowed down against the 32% rate posted a year ago.
The gross operating profit climbed 30% and reached over 770 million RON (209.7 million euros).
"The first half of 2008 was characterised by difficult market conditions and by rising competition. BRD adapted to this climate and responded with adequate commercial measures, also continuing the implementation of strategic policies to improve the IT infrastructure and develop distribution channels," said Patrick Gelin, chairman of BRD. Despite the record half-year profit, the ROE (Return On Equity) fell to 32.4%, against the peak of 38.1% reached halfway through last year. The cost/income ratio remained relatively stable, at 45.1%, from 45.2% in H1 of 2007.
The net cost of risk (provision-related expenses and losses from non-collectible receivables) went up slightly, from 95 base points on June 30, 2007 to 103 base points on June 30, 2008.
The difficult market conditions cited by Gelin were reflected in a slowdown in the annual growth rate of the volume of granted loans, but led to an increase in attracted deposits. The volume of loans climbed 40% compared with a 51% increase witnessed a year ago.
The overall volume reached over 29 billion RON (7.9 billion euros). Retail lending continued to be the most dynamic segment with a 43% rise, however, below the 48% rate recorded on June 30, 2007. In fact, the portfolio of active individual clients went up by around 400,000 people and reached over 2.5 million in total. Last year, corporate loans still had a higher growth rate compared to retail loans, but halfway through this year the dynamics of
