BRD-SocGen, the second leading bank in Romanian banking system, has posted more than 90% growth in net profits in euros for the first three months of the year.
The bank''s results confirm rising profitability across the banking system for Q1, as already shown by the results of a number of smaller banks. BRD''s profits in ROL rose by more than 70%
BRD generated a first-quarter net income of 1,453bn ROL (39.2 million euros) in the first three months, up from 839bn ROL (20.6 million euros) in the same period last year.
Bank representatives say the increase in profits was mainly due to the temporary reduction in expenses in terms of provisions and the lower volume of investment planned for this period.
"We need to take into account the fact that we had very low risk costs (provision spending). We also had lower expenses in terms of investment expenses because most of our investments are planned for the other quarters of the year," said Patrick Gelin, the bank''s chief executive.
The bank''s total revenues increased by more than 150% in the first three months of the year compared with the corresponding period of 2004 to reach 11,626bn ROL (131.5 million euros), despite the decline in interest rates on the market. Again despite the interest rate cuts the bank''s gains from financial intermediation, which accounts for the spread between rates on loans and rates on deposits, have not changed significantly. "Our financial intermediation margins fell slightly in the first quarter, but the decline was lower than expected. The effect of the fall in interest rates on our financial statements is not completely shown by the first-quarter results. The effects are due to show by June," Gelin said.
The bank''s assets increased by 12% in ROL and by 22% in euros by the end of March compared with the end of last
