Romania Banking Sector Might Close 2010 On Loss - BCR Head

Romanian banks might post an aggregated loss this year, under local accounting standards, on increasing risk costs, said Thursday Dominic Bruynseels, chief executive officer at local lender Banca Comerciala Romana, or BCR.

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According to Bruynseels, BCR's operating profit rose since the beginning of the year and the bank might record positive developments in terms of net profit if provisions decrease in the coming period.

However, Bruynseels said he doesn't expect a reduction of provisions to decrease until the second half of next year.

The bank's retail loan portfolio improved before the Government announced to cut by 25% the salaries in the public sector, but began to deteriorate again afterwards, BCR's head told a news conference.
As regards the corporate sector, he said growth pace of non-performing loans will not diminish before yearend.

According to him, the Government should pay arrears to small- and medium-sized enterprises and companies should adjust their costs and spend only what they can afford to.

The local banking sector closed the first half with an aggregated loss, but the central bank does not consider necessary to change provision regulations.

In 2009, the local banking sector posted a net profit of RON815 million.

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