UniCredit Tiriac Bank, the local branch of Italian UniCredit group made 358 million RON (a little more than 97 million euros) in net profit last year, therefore achieving a 37% increase in RON.
The profit growth came as a result of the business development, with the volume of assets going up by 36% in RON to 17.5 billion RON (the equivalent of 4.4 billion euros).
The bank will keep the entire last year’s profit and incorporate it into the share capital.
"The Board of Directors approved the proposal, which will be submitted to the General Meeting of Shareholders for voting, to include the 2008 profit in the capital. It will be an additional contribution to the bank’s capital in 2009," said Rasvan Radu, chief executive of UniCredit Tiriac Bank. He added that there was no further need for capital increases at the moment.
The bank’s solvency indicator currently stands at 10.2%, which level Radu deems comfortable, compared with the minimum 8% required by the Basel II regulations enacted by the NBR. At the end of last year, the system average stood at 12.3%, after the NBR had requested some banks to increase their capitals, precisely to revert to comfortable financial soundness levels.
Radu would not provide estimates about the performance of the business this year, pointing the finger at the high level of uncertainty about the performance of the economy as a whole.
He did say, however, that the bank would focus on cost cutting, considering the uncertainty of the revenue trend. UniCredit Tiriac froze the plan to expand its territorial network, after having opened more than 100 branches last year, to a total of 242.
Even with the network expansion, UniCredit continued to improve its efficiency indicator, with the cost/revenue ratio going down to 48% last year from 51% in 2007.
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