Good results on cost control, provisioning

BRD’s reported net income came to RON 416 mln in the second quarter – up
by 19% y-o-y and 23% q-o-q as risk cost was positive and OPEX was under
control with higher revenues y-o-y.
 Net interest income was at RON 658 mln, up by 16% y-o-y thanks to higher
interest rates and volumes but q-o-q there was a decline of 2% as a result of
higher cost of liabilities thus NIM also declined to 3.5% from 3.7%.
 Net F&C was up 9% q-o-q due to higher fees across all segments offset by
lower gains from FX and derivatives.
 Costs increased 15% q-o-q and 12% y-o-y, nevertheless q-o-q the growth
was below 1% if we adjust for the Deposit Guarantee fund payment in the first
quarter.
 Risk cost was again positive due to sustained recoveries with NPE ratio at alltime low of 2.2%, coverage at 74%.