Loading ...Standard & Poor’s Ratings Services announced that it has lowered its long-term counter-party credit rating on Romania’s Banca Comerciala Romana (BCR) to “BB+” from “BBB-”, maintaining the negative outlook.
“As the largest bank in the country, BCR’s performance and fundamentals are highly correlated with sovereign creditworthiness through, among other things, its role as the major financier of the local economy and its material holdings of government securities,” said Standard & Poor’s credit analyst Magar Kouyoumdjian in an October 29 release.
Romania’s economy has been overheating and over-leveraging, a process fuelled by high non-government credit growth. This has given rise to the private sector’s high indebtedness, making banks’ asset quality vulnerable, warns the rating agency.
Standard & Poor’s Ratings on October 27 lowered its long- and short-term foreign currency sovereign credit ratings on Romania to “BB+/B” from “BBB-/A-3”, and its local currency long-term rating to “BBB-” from “BBB”. The “A-3” short-term local currency rating was affirmed. At the same time, the Transfer & Convertibility (T&C) assessment was lowered to “BBB+” from “A-”.
A downgrade of the country’s largest bank is common practice after the respective state’s sovereign rating is lowered.
Banca Commerciala Romana (Romanian Commercial Bank – BCR), the biggest banking group in Romania announced a net profit of 1.247 billion lei at the end of Q3 of 2008.
Net profit after taxes and minority interests increased by 71.8% from 725.8 million lei (219.6 million euro) to 1,247.0 million lei (341.5 million euro), reads a BCR release.
Banca Commerciala Romana (Romanian Commercial Bank – BCR), the biggest banking group in Romania announced a net profit of 1.247 billion lei at the end of Q3 of 2008.
Net profit after taxes and minority interests increased by 71.8% from 725.8 million lei (219.6 million euro) to 1,247.0 million lei (341.5 million euro), reads a BCR release.
According to the BCR, net interest income rose by 58.5% from 1,365.9 million lei (413.3 million euro) to 2,165.3 million lei (592.9 million euro). Also, the return on equity increased from 22.0% in the Q3 of 2007 to 32.3% in the Q3 of 2008, while the cost-income ratio improved from 56.0% in the Q3 of 2007 to 42.7% in the Q3 of 2008.
“We achieved very good results in line with our 2008 set objectives. We continued capturing the good opportunities of the market while successfully controlling costs and appropriately manage the risks” said Dominic Bruynseels, BCR CEO.
“We are striving to further improve the quality and efficiency of our business. BCR is in good shape to counteract any adverse effects of the turbulences in the international financial markets and helping our customers to achieve their aspirations” Dominic Bruynseels underscored.
Q3 results are confirming BCR’s capacity to develop a sound and sustainable business. Q3 2008 saw a good overall loan growth. The volume of aggregate loans to customers portfolio (before provisions, IFRS) increased by 17.3% to 43,278.3 million lei (11,567.7 million euro) as at 30 September 2008 from 36,888.2 million lei (10,224.9 million euro) at 31 December 2007.
At the same time, total assets increased moderately by 4.0% from 59,611.1 million lei (16,523.3 million euro) as at 31 December 2007 to 62,004.3 million lei (16,572.9 million euro) as of 30 September 2008.
Higher growth rate of Loans to customers than of total assets is showing that more resources are dedicated to the core business (i.e. by reduction of interbank placements and financial assets).
Higher growth rate of Loans to customers than of total assets is showing that more resources are dedicated to the core business (i.e. by reduction of interbank placements and financial assets).
The share of loans in domestic currency in BCR’s portfolio – 49.0% of total loans – is showing a well-balanced structure. FX loan portfolio is only euro and US dollar denominated.
Corporate Loan portfolio represents 47.1% in the total customer loans while Retail Loans (including micro businesses) is 52.9%.
Corporate Loan portfolio represents 47.1% in the total customer loans while Retail Loans (including micro businesses) is 52.9%.
Deposits from customers increased YTD September by 9.0% to 32,964.3 million lei (8,810.9 million euro) from 30,251.8 million lei (8,385.3 million euro) as at 31 December 2007. Retail deposits (including micro businesses) represent 73.1% in the total deposits from customers while corporate deposits are 26.9%.
BCR continued to expand its ATM network by adding 281 new machines from 30 September 2007 up to 1.673 units (20.10% YOY increase) and its POS network to 14.502 units by installing 2.519 new devices at the merchants (21,02% YOY increase).
Moreover, BCR continued to extend its branch network in Q3 2008 at the same time developing alternative channels. In Q3 2008 BCR opened 19 new branches, reaching to a network of 607 outlets as of end-September but also launched “24 Banking” financial services whilst extending the range of services at ATM.
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