Banca Comerciala Romana (BCR) reported RON697mn (€150mn) net profit in H1, 130% up y/y and the best financial result in the past decade. The profit from operations edged up more modestly, by 1.5% y/y to RON740mn.

However, the 130% surge in the net profit is the effect of the low base created last year and it means only that the net earnings returned in line with bank’s operations and size.

Indeed, the bank posted outstanding financial losses in H1 last year. While the bank spent RON62mn on provisioning (for bad loans) in H1 last year, by contrast it reduced its volume of provisions (with a positive impact on the net results) by RON30mn this year as a result of the better quality of the stock of assets. The non-performing loans dropped to 6.7% at the end of June from 8.1% at the end of 2017 and 11% at the end of June 2017.

Meanwhile, the bank extended RON4.67bn new loans, mostly to households, and hit RON35bn stock of loans, though this was only 4.5% up y/y (versus 6.8% y/y average advance of the market) and half of its RON70.2bn assets. 

Credit creation advanced by 15% y/y in H1 to RON4.67bn (€1bn). The bulk of the new loans were created in the retail sector (households but also microenterprises): RON4.1bn, while corporate lending accounted for only RON568mn. Mortgage and consumer loans have visibly supported the bank's activity. For comparison, the bank lent RON2.6bn retail loans and RON1.5bn corporate loans in H1 last year.