March 1 (SeeNews) - Austria's Erste Group said the net profit of its majority owned Romanian unit, Banca Comerciala Romana (BCR), surged 80% year-on-year to 1.2 billion lei ($289 million/253 million euro) in 2018.
The results were supported by an improved operating profit, lower risk costs and growth on all business lines, BCR said in a press release communicating its 2018 unaudited consolidated results on Thursday.
"Unfortunately, at the end of 2018 we are working in a more unpredictable economic context than ever. The direction we are currently heading can strongly influence future generations. It is necessary to sit around the table and analyze what works and what doesn't work. Recent history shows that sectorial taxes do not help the economy and generate distrust, CEO Sergiu Manea said, referring to government's decision to introduce an additional tax on bank assets.
The government approved an emergency decree introducing the so-called 'greed tax' on banks' assets in December. The tax is to be correlated to the values of the 3-month and 6-month Romanian Interbank Offer Rate (ROBOR).
BCR's non-performing loan (NPL) ratio decreased to 5.8% at end-December from 8.1% at end-2017, while NPL coverage ratio was 100.3%, the statement further showed.
BCR's operating result rose by an annual 22% to 1.63 billion lei in 2018 as a result of higher net interest income, commissions and net trading result.
Net interest income grew by 16% on the year to 2.04 billion lei in 2018, as a result of larger volumes of current accounts.
Net commission income increased by 0.9% to 707 million lei due to higher maintenance revenue and cash and cashless transactions. Net trading result increased 26% to 447 million lei.
Loan volume grew by 36.4 billion lei in 2018, up 8.7% on the year, while deposits rose by 5% to 55 billion lei.
The bank's total assets increased to 71.5 billion lei at the end of December from 70.5 billion lei at the end of 2017.
(1 euro=4.7416 lei)