UniCredit Tiriac Bank posts H1 profit of EUR 46 mln on higher revenues

The net profit of UniCredit Tiriac Bank rose almost three fold to EUR 46.2 million in the first semester against the same period of last year, sustained by a 17 percent expansion in revenues to EUR 158 million.

The lender added 2.5 percent in operational expenses to EUR 73 million due to variable business costs and the depreciation of capital investments. The higher revenues lowered the cost to income ratio by 7 percentage points to 46.2 percent.

Rasvan Radu, CEO of UniCredit Tiriac Bank, commented that companies are facing a “delicate” situation, despite the statistical growth in GDP and the return of the banking system to profit.

“The consumption remains largely modest, and the loan demand continues to fall, while the number of bankruptcies and non-performing loans continued to grow,” said Radu.

The loan book slightly grew by 0.7 percent to EUR 3.9 billion (EUR 4.4 billion including externalized loans), driven by an increase in the SMEs and mid cap segments. Deposits, meanwhile, expanded by 10.3 percent to EUR 2.9 billion.

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Radu said the SMEs and mid caps will remain the main growth drivers for the bank, but it will look to developed niched products in the retail segment following the takeover of the retail portfolio of RBS, in a deal that should be completed this semester.

UniCredit Tiriac Bank increased loan provisions by 73 percent to EUR 51.8 million, but said this was relatively similar to last year if the changes in regulation are taken into account. It reported an annualized risk cost of 2.4 percent.

The bank said it has diversified its financing sources after successfully raising EUR 122 million from a bond issue this summer. The loan to deposit ratio fell by 18 percentage points to 127 percent, including the bond sale.

The lender’s return on equity more than doubled to 14.5 percent and the return on assets also increased to 1.6 percent, while the solvency rate stood at 13.7 percent.  Its assets rose by 7.4 percent to EUR 5.5 billion.

The bank operates through 188 subsidiaries across the country, employing some 2,800 people.

The consolidated assets of UniCredit Tiriac Banking, UniCredit Leasing Corporation and UniCredit Consumer Financing amounted to EUR 6.2 billion, while the profit soared to EUR 47 million.

Ovidiu Posirca