BCR, the biggest bank on the market, made 306.6 million RON (about 73 million euros) in net profit after the first five months of this year, according to the Romanian accounting standards, down 27% compared with the same time in 2008, banking sources say.
The profit is about 22% lower than the figure posted at the end of April.
The bank is feeling the pressure of spending on provisions for non-performing loans, with such costs amounting to 12.5 billion RON (2.98 billion euros) at the end of May.
BCR’s representatives did not care to comment on the information considering that Erste Group, the majority shareholder, requires that only financial results in line with the international accountings standards used group-wide should be published.
Still, BCR continues to report data to the Finance Ministry and the NBR using the local standards, as every bank does.
The different treatment of provisions in the two accounting versions has been creating spectacular gaps between financial results because of the higher and higher amounts banks have to immobilise at the request of NBR, which can be reflected more favourably using the international accounting standards.
This is why BCR posted 5.9 million-RON (1.37 million-euro) net profit in the first quarter according to the Romanian accounting standards, while according to the international standards, the BCR Group, and Erste as the majority shareholder, posted net profit worth 78.3 million euros, down almost 14% compared with the first quarter of 2008. Erste officials declined comment on the wide gap between the two results.
One month later, in April, BCR’s net profit by local accounting standards jumped from 5.9 million RON to 392 million RON, only to go down to 306.6 million RON in May.
NBR promised gradual convergence of its accounting requirements towards international accounting standards, first of all by relaxing provision conditions, and is currently working on amending its regulations.
Many banks have accumulated losses because of provision costs. System-wide, the net loss stood at 54 million euros in May.
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