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BRD H1 Results: Steady growth of market shares, but net result affected by higher provisioning level of non-performing loans

29 Jul 2012

The main financial ratios of BRD-Groupe Société Générale as of June 30, 2012, according to the International Financial Reporting Standards (IFRS):

During the first half of 2012, the bank's operational and commercial activity was marked by an increase in market share both for loans and deposits.

The volume of loans is progressing at a superior rate compared to the banking system (+ 5% for BRD versus +1.7% for the banking system, compared to the end of December 2011). The total amount of gross loans granted to clients is of 35.2 billion RON, higher by 4% compared to December 31, 2011 and by 5% compared to June 30, 2011. The main drivers that triggered this growth during the first semester were the ''Expresso'' promotional campaign as well as the production of loans granted under ''Prima Casa'' governmental programme.

Deposits were, at end of H1, up 9% against December 31, 2011 and +13% compared to June 30, 2011 reaching 32.9 billion RON.

The Net Banking Income decreased by approximately 6%, due mainly to the continuous narrowing of the net interest margin (-9%), which was significantly influenced by the reduction in market interest rates. Nevertheless, the net fees and commissions for services proved their resilience.

A strong control of the operating expenses was maintained during the first semester, that resulted in a 2% decrease compared to June 30, 2011. The cost to income ratio stands at 47% for the six months that ended on June 30, 2012.

The net profit of the first semester is of 39.4 million RON, influenced by a high net cost of risk, i.e. 714 million RON. The level of the Net Cost of Risk was mainly triggered by the decline in the value of collaterals related to NPL loans. However, as far as the main customer segments are concerned, the cost of risk for individuals has a positive trend, while, in the case of corporate customers, a progressive reduction of new entries into default can be noticed.

The financial statements and the Board of Directors Report are available to the public and investors on the website of the bank: www.brd.ro. Copies of the documents can also be obtained upon request, free of charge, at the head office of BRD-Groupe Société Générale, located at 1-7, Ion Mihalache Boulevard, 1st district, Bucharest.

BRD - Groupe Société Générale is the second largest Romanian bank in terms of total assets and has the second market capitalization on the Bucharest Stock Exchange. BRD is part of the Société Générale Group, one of the largest groups of financial services in the Euro zone.

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