BRD - Groupe Société Générale (BRD) Q3 2024 earnings summary

Executive summary

• Net profit for 9M 2024 was RON 1,094m, down 10.9% y/y, as strong lending and deposit growth was offset by a new turnover tax and higher risk costs.

• Lending activity grew 15% y/y, with corporate loans up 23% and record individual loan production (+48% y/y in 9M 2024).

• Deposits increased 8% y/y to RON 65.4bn, with retail deposits up 9.9% and corporate deposits up 4.5%.

• Digital transformation advanced, with 1.65m YouBRD users (+24% y/y) and 21m transactions (+29% y/y).

• Asset quality remained robust, with NPL ratio at 2.4%–2.37% and coverage at 78.6%–78.55% at September 2024 end.

Financial highlights

• Net banking income rose 5.4% y/y to RON 2,984m in 9M 2024, with net interest income up 7.1%.

• Operating expenses increased 8.8% y/y, mainly due to a new 2% turnover tax and higher staff costs.

• Net cost of risk was RON 136m in 9M 2024, compared to a net release of RON 35m in 9M 2023.

• Cost/income ratio at 50.7% in 9M 2024, up from 49.1% in 9M 2023.

• ROE at 16.1% in 9M 2024, down from 20.7%–20.9% in 9M 2023.

Outlook and guidance

• Lending growth expected to remain dynamic, with NPL ratio projected to stay below 2.5% by year-end.

• Asset quality ratios anticipated to remain sound, with risk costs at normalized levels.

• Management committed to digitalization and green financing, with sustainable financing targets already surpassed.

• Comfortable capital and liquidity positions support continued business growth.

• No subsequent events identified after the reporting date.