In 9M 2019, the group recorded an increase in net interest income of 9.7% YoY, increase in net fee an commission income of 2.1% and an increase in net profit of 7.4%.
As BRD published their 9M 2019 report, we are brining you key takes from it. According to the report, net interest income amounted to RON 1.6bn, representing a strong growth of +9.7% YoY. Such an increase came on the back of volumes growth on all segments and favorable structure shifts, while still benefiting of rising RON interest rates. Meanwhile, net fee and commission income observed a growth of 2.1% YoY, which could be attributed to the dynamic cards business. As a result, Group’s net banking income witnessed an increase of +6.9%, amounting to RON 2.45bn.
Operating expense were 7.4% higher, amounting to RON 1.18bn, which can mostly be attributed to a rise in staff costs (+6.9% YoY), and regulatory costs (RON 72m vs RON 35m in 2018). Consequently, CIR stood at 48.5%, showing a slight increase of 0.24 p.p. YoY.
The quality of the loan portfolio further improved, which can we seen by the continued decline in NPL ratio to 4.0%, a decrease of 1.8 p.p. and a solid level of coverage ratio of 74.1%.
Risk costs remained once again positive, amounting to RON 207m, as a result of a strong recovery performance and the exceptional insurance indemnities, within a favorable economic environment.
As a result of all the above, BRD Group observed a solid performance of the bottom line, with net profit amounting to RON 1.23bn (+7.4%).
BRD Group Performance (9M 2018 vs 9M 2019) (RON bn)
Turning our attention to the balance sheet, total assets recorded an increase of 2.7%, amounting to RON 55.98bn. Of that, net loans and advances to customers recorded a growth of 3.3% YoY and currently account for 54.1% of the total assets. The mentioned growth was mostly driven by growth of loans to individuals and large corporate customers. On the liabilities side, deposits from customers, amounted to RON 43.9bn (+0.9% YoY). The slight increase was backed by higher inflows from individuals, small and medium business customers, still mostly driven by sight deposits. As a result, L/D ratio stood at 67.2% (+1.6 p.p. YoY), showing room for further potential loan growth.
On the bank level, the CAR stood at 20.9% (+1.5 p.p. YoY), indicating that the bank is well capitalized. Of that, the capital adequacy ratio consists solely of Tier 1, which stood at 20.9%.
