Andreas Treichl, CEO of Erste Bank, the majority shareholder of BCR, said the bank generated more than 90% of the profit, whilst the contribution of the group's other subsidiaries was "negligible". BCR's return on equity went up from 21.2% to 30.4%, and the share of costs in total revenues plunged from 54% to 41.6%.
"BCR has become the most efficient bank in the group, although it continues its integration process and there are a lot of things to improve and problems to fix. The 8.9% increase in costs was mainly because of branch network expansion and higher inflation," commented Andreas Treichl, head of Erste Bank.
At the same time, he added, there are also costs worth 11.4 million euros caused by BCR's integration into the group. The total amount taken into account for this purpose in 2008 stands at no more than 40 million euros.
As for personnel restructuring costs, they could be lower than initially scheduled, given that the number of jobs to be shed this year will be lower by 1,000, compared to the initial figure of 1,500. Mid-year, BCR had 9,562 employees, but should reach 8,700, instead of 8,200, by the end of 2008.
Treichl said the target was modified because the bank dropped its plans to outsource cash transportation services.
"We found that there are not enough professional providers of this type of service in Romania and we cannot hold a real tender to select a company." On the other hand, he said that lending at BCR increased at a substantially slower rate in the first half against the entire market, but adds that this is actually a strategic option to keep a balance between the volume of loans and the volume of deposits attracted, so that their ratio does not exceed 110-115% at the very most.
The slowdown in lending was apparent by the only 1.8% increase of BCR's assets in six months, which reached a total of 16.6 billion euros.
However, even though the growth rate of loans granted by BCR slowed down to 42% in June compared with a peak of 48% in December (whist the market continued to speed up to an annualised pace of 66%), the loan/deposits ratio at BCR exceeded the cap mentioned by Treichl and reached 126% from 112.3% only a year ago. The reason: deposits rose by merely 28% from the first half of 2007 and reached 8.8 billion euros, while loans went up by 44.4% and reached 11.18 billion euros.
Still, Erste's boss says that BCR has surplus RON cash reserves. He added that 75% of retail loans in a foreign currency are financed by euro deposits, which are attracted by the BCR, whilst Erste covers the rest including corporate loans.