BRD - Groupe Société Générale (BRD) Q2 2024 earnings summary

Executive summary

• Net loans outstanding increased 14% year-over-year, driven by strong growth across all business lines and record retail loan origination, up 51% year-over-year.

• Corporate lending grew 22–27% year-over-year, supported by SME programs and large corporate partnerships.

• Net profit for H1 2024 was RON 694m, down 9.6% year-over-year, with ROE at 15.9% and cost-to-income ratio rising to 52.2% due to a new turnover tax.

• Deposit base grew 12% year-over-year, with both retail and corporate segments contributing.

• Digital adoption accelerated, with 1.6 million mobile app users (+20% YoY), and sustainable financing production surpassed EUR 1.1bn, exceeding the 2025 target.

Financial highlights

• Net banking income grew 5.7% year-over-year in H1 2024, reaching RON 1,968m, mainly from higher net interest income (+7.3%) and commissions (+6.5%).

• Operating expenses increased 8.9% year-over-year, mainly due to a new turnover tax and higher staff costs.

• Net cost of risk was RON 91m in H1 2024, up from a net release of RON 5m in H1 2023, reflecting normalization.

• Cost-to-income ratio increased to 52.2% (adjusted for tax: 49.1%), up from 50.7% YoY.

• Total assets increased 12% YoY to RON 86.2bn (Group).

Outlook and guidance

• Romania's GDP growth is expected at 2.8–3.3% in 2024, with inflation trending down to 4.9% by year-end.

• NPL ratio expected to remain below 2.5% throughout 2024, with coverage ratio at 77%.

• Anticipate further central bank rate cuts of 25–50 basis points by year-end.

• Continued focus on digitalization, cost control, and sustainable finance.