Surprising Q1 on revenues, lower provisioning

BT’s reported net income came to RON 1,132 mln in the first quarter, up by
35% and 63% y-o-y and q-o-q, respectively. Better results stemmed from
lower provisioning, higher revenues and a solid bargain gain from the
acquisition of the BCR Chișinău S.A.
 Net interest income went up by 9% q-o-q and 24% y-o-y as a result of higher
lending flows and higher NIM while net fees also increased thanks to strong
client activity. Net trading was also better after a weak Q4 due to higher income
from derivatives.
 OPEX increased 5% q-o-q on higher personal expenses and the newly
implemented turnover tax. Despite these increase the cost-to-income ratio
could improve by 0.5%pts to 46.8% y-o-y and stagnate q-o-q.
 Risk cost was rather low at RON 3 mln including a smaller release of other
provisions related to litigations. Asset quality stayed benign with NPE
unchanged at 2.0%.
 Net loans continued to expand (+9% q-o-q) driven by corporates outpacing
deposits leading to a LTD ratio of 54.6%.
 Tier1 level was at 21.5% including the profit for the quarter.