UniCredit Tiriac posts 37 percent hike in profit

At a Cash Reserve Ratio of 20 percent for foreign currency, compared to the current 40 percent level imposed by the National Bank of Romania, UniCredit Tiriac Bank, one of the top 10 players in the Romanian banking system in terms of assets, would stop externalizing loans, said the lender's Chief Executive Officer (CEO), Rasvan Radu. "However, I am afraid of any depreciation of the national currency," Radu added. The bank has 70 percent exposure on foreign currency, but will benefit from the capitalization program worth €4 billion granted by the Italian and Austrian governments for the UniCredit group.

The local lender posted RON 358.3 million (€97.29 mln, computed at an average 2008 exchange rate of RON 3.6827/€1) in net income, up 37 percent year-on-year, company officials announced on Wednesday. This profit represents more than one tenth of the consolidated profit of the entire banking system in Romania. "We have succeeded to improve the bank's profitability in a sustainable way, considering that the branch network developed more rapidly and far beyond initial plans," said Radu. UniCredit Tiriac Bank opened 101 units in 2008, reaching 242 branches by the end of the year.

The value of the bank's total assets amounted to RON 17.5 billion (some €4.75 mln), a 36 percent increase compared to 2007. The loan-deposit ratio was 145 percent at the end of 2008, following a downward trend, considering that almost 95 percent of the bank's foreign financing is ensured by the mother bank, said UniCredit officials. The bank's solvency indicator is 10.2 percent, according to data provided by UniCredit Tiriac Bank. The lender will use the entire 2008 profit to capitalize the bank, said Radu, adding that the decision to not grant dividends will soon be approved by the bank's Board of Directors, according to the NewsIn agency.

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