BRD reports net profit of 1.2 billion RON, up 20 percent in first nine months

BRD Group recorded a net profit of 1,227 million RON in first nine months of 2023, higher by 20.8 percent year-on-year.

During the first nine months of 2023, favoured by volumes growth and high level of interest rates, BRD Group revenues increased by +11.4 percent YoY, reaching RON 2,831 million. Net interest income, up by +16.5 percent YoY, brought a strong contribution to this performance, counting on the good dynamic of lending activity and higher interest rates on asset portfolio. These effects were tempered by rising costs of funding, primarily associated with commercial term deposits marking a steep increase over the analysed period. Net fees and commissions reduced by -2.1 percent YoY, mainly influenced by lower service fees from cards activity given higher penetration of current account packages, in line with market trend, and decreasing volume of cash transactions mainly on a base effect. These were partially counterbalanced by dynamic brokerage (mainly advisory) and insurance activities. Other income, up by +6.9 percent YoY in 9M 2023, was pushed by trading activity.

Operating expenses totalled RON 1,390 million in 9M 2023 (vs RON 1,276 million in 9M 2022), increasing by +9 percent YoY, given the inflationary context and persisting pressure on wage costs. Staff expenses evolution, +8.8 percent YoY, was linked to a large extent to price adjustments and increased benefits. Other costs categories mainly reflect higher expenses on external services and the significant effort on IT&C to further deliver on Bank’s digital transformation roadmap, while maintaining a strong focus on controlling the run-the-bank costs.

On the back of these developments, overall operating performance was solid, with gross operating income increasing by +13.9 percent to RON 1,441 million compared to RON 1,265 million in 9M 2022. BRD Group cost to income ratio registered an improvement of 1.1 ppt to 49.1 percent in 9M 2023, on positive jaws effect.

“BRD delivered solid performance during the first nine months of 2023 with a very strong commercial momentum and excellent financial results. Lending activity recorded a double-digit growth on an annual basis, although the pace slowed down during third quarter. The contribution from corporate segment, built on both SMEs and large corporates, is particularly remarkable. Retail lending was more dynamic on consumer, marking new record levels, while demand for housing loans remained influenced by weakening market given high rates environment. This outstanding commercial performance, accompanied by high quality of assets, translated into excellent financial results. The period ending first nine months of the year was marked by strong increase of revenues, constant focus on costs control and supported by a cost of risk in net release. All these lines contributed to a significant increase of net result, +20.8 percent YoY, and elevated ROE of 20.9 percent. Going forward, BRD remains truly committed as a solid partner for its customers, offering diversified financial solutions and high advisory expertise, being at the same time a trustworthy actor of the Romanian economy“, said Maria Rousseva, Deputy CEO of BRD Groupe Société Générale.