BRD net earnings down 19% in Q1

 However, the bank’s quarterly results are above expectations of analysts of a 40 percent decline in net income. Provisions in the first quarter rose to €47 million, 225 percent higher than in Q1 2008. Bankers are forced to make provisions worth hundreds of millions of euro, due to the worsening of the loan portfolio. The banking system leader, Banca Comerciala Romana (BCR), owned by Austrian Erste group, has pumped some €72 million into provisions in Q1 2009. At the end of March, the bank’s assets totaled €11.9 billion, slightly higher than in December 2008, when assets amounted to €11.7 bln. “We saw a significant decline in demand for lending and a sharp increase in risk costs. These two features were mainly due to a slowdown in economic activity and very high interest rates, especially for lei,” the bank’s President and General Manager, Patrick Gelin, said at a press conference yesterday. “BRD, which had foreseen this situation months ago, adjusted to this through operations in which it relied on its flexibility and its varied range of products. Furthermore, we must note that, although significantly higher compared to last year, the net risk costs should be significantly below the banking system average,” he added. The total volume of loans granted by the bank in the first three months amounts to €7.7 billion, 19.5 percent higher year-on-year. Deposits rose 9.4 percent year-on-year, up to €7.1 billion. BRD SocGen is listed on the Bucharest Stock Exchange (BVB). The lender’s shares rose less than one percent yesterday, after the company announced its financial results, in spite of the decline in earnings.