Romania's largest bank BCR needs 460m lei recapitalization in the next two years, stress tests show

Publish date: 25-05-2009
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The largest bank by assets in Romania, Banca Comerciala Romana (BCR), needs a 460 million lei recapitalization this year and in the next one, considering the past year financial results, the stress tests applied by the central bank (BNR) show, people from the banking market told NewsIn.

BNR carried the stress tests at the request of the International Monetary Fund which, along with other international lenders, granted Romania a 20 billion euro loan to restart engines behind the economy.

BCR would need 230 million lei in 2009 and then another 230 million lei in 2010 to keep the solvency rate at 10 percent. If the lender fails to carry the recapitalization, the solvency rate could fall to 8.7 percent at the end of 2010, the people familiar to the situation said.

The lender's executive president, Dominic Bruynseels, recently said BCR has a solvency rate of over 14 percent by the International Financial Reporting Standards and of 10 percent by the Romanian Accounting Standards. Still, the bank would requisite extra capital in the event the central lender raises the required level of solvency from 8 percent to 10 percent for commercial banks.

The stress tests are carried in 2009 and 2010 with the purpose to assess the need of extra capital reported to the financial indicators on the past year. Since the beginning of the year, several banks hiked capitals by incorporating the past year profit.

The general assembly of BCR shareholders agreed on May 14 to grant dividends of 813.07 million lei, accounting for 40 percent of the net consolidated profit recorded by the group in 2008, and approved the financial results obtained at the end of last year.

BCR registered a net profit after tax and minority interests of 330.3 million lei in the first quarter of 2009, down 13.7 percent on the similar period of the previous year.
The group's total assets advanced 4 percent in the first three months to 71.865 billion lei from 69.08 billion lei at the end of December.

BNR asked for capital hikes in the case of 12 lenders for a total value of around 4.15 billion lei after the stress tests applied at the request of the IMF, people from the market told NewsIn yesterday.

Lenders need to bring additional capital in two installments, one until September 30 2009 and the second until March 31 2010.


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