In Q1 2024, BRD Group recorded a net interest income growth of 7% YoY, a net fee and commission income increase of 8%, net banking income growth of 5%, and a net income to majority of RON 326.3m, a 4% decrease YoY.
Starting off at the top of the P&L, BRD Group recorded a net interest income of RON 716.2m, an increase of 7% YoY. Improvements in the balance sheet supported this, as cash and current accounts with the Central Bank grew by 58% YoY to RON 11.8bn, loans and advances to credit institutions grew by 4% YoY to RON 6.1bn, while loans and advances to customers increased by 9% YoY to RON 40.6bn. Given the high interest rates in Romania (currently at 7.0% for deposits at the Central Bank), all of these assets yielded higher returns, thus leading to an improvement in the net interest income.
The most important category in this, i.e. loans and advances to customers, recorded an increase in both the corporate and retail segments. The retail segment grew by 7.2% YoY, and new loans granted to individuals grew by 43% YoY, while inside this, consumer loans increased by 51% YoY. New housing loans also increased by 45% YoY. On the corporate side, net loans grew by 20% YoY, and inside it, net loans granted to SMEs increased by 27% YoY, and to large companies by 17%, while leasing activity recorded an increase of 20% YoY.
Net fee and commission income meanwhile, grew by 8% YoY to RON 186m, with BRD continually investing and improving its digital platform and services. In fact, YouBRD reached 1.5m users in Q1 2024, an increase of 28% YoY, contributing to this growth.
Together, this led to a net banking income of RON 984.7m, an increase of 5% YoY. In terms of operating expenses, they amounted to RON 529.5m, an increase of 4% YoY. Inside the OPEX, other op. expenses grew the most in absolute terms, by 16% YoY to RON 172.6m, followed by personnel expenses at 9% YoY to RON 244.7m, while the Contribution to the Guarantee Scheme and Resolution Fund decreased by 43% YoY to RON 43m. The increase in other op. expenses came due to a higher tax on turnover of RON 30m (new law starting 1 January 2024, representing 2% of the turnover in 2024/2025, and 1% of the turnover in 2026). Meanwhile, the growth in personnel expenses came due to higher wages, mainly related to inflation.
Moving on, the cost of risk amounted to RON 54m (Q1 2023: RON 9.4m), mainly as a result of higher provisions for loans, which more than doubled YoY. Mainly as a result of this higher cost of risk, the net income to majority decreased slightly, by 4% YoY to RON 324m.
BRD Group key financials (Q1 2024 vs. Q1 2023, RONm)
Source: BRD Group, InterCapital Research
Taking a quick look at the balance sheet, due to the developments in cash held at the Central Bank, higher loans to other credit institutions, and higher loans to customers, the total assets of BRD Group grew by 15% YoY and amounted to RON 83.8bn. On the other hand, total liabilities grew by 15% YoY to RON 75bn. The largest increase here was recorded by deposits to customers, which grew by 13% YoY to RON 62.9bn, followed by borrowed funds at 24% YoY to RON 7bn. Inside the deposits, retail deposits grew by 12% YoY to RON 40.8bn, while corporate deposits increased by 16% YoY to RON 21.9bn. Inside the corporate deposits, SMEs recorded an increase of 13% YoY to RON 9bn, while Large corporate deposits increased by 18% YoY to RON 12.9bn.
