By Irina Savu
Feb. 2 (Bloomberg) -- Banca Transilvania SA, Romania’s second-biggest publicly traded bank, said full-year profit declined 84 percent as the recession prompted increased provisions for bad loans.
Net income declined to 62 million lei ($21 million) in 2009 from 397 million lei a year earlier, the Cluj, Romania-based lender said today in a preliminary filing to the Bucharest Stock Exchange. The bank more than doubled provisions for bad loans, which represent 4.8 percent of total lending, to 533 million lei last year from 206 million lei in 2008.
Overdue private debt more than doubled last year as the recession slowed wage gains and pushed up unemployment. Romania’s economy contracted an estimated 7 percent last year, after growing 7.1 percent in 2008, the fastest pace in the European Union. Unemployment rose to 7.8 percent in December from 4.4 percent a year earlier and wage growth slowed to an annual 0.9 percent from as much as 20 percent in 2008, making it more difficult for people to meet payments.
“This year won’t be easy for anybody, we know that, especially the first half will be difficult for our customers and for the banking system as a whole,” Chief Executive Officer Robert Rekkers said in the statement. “Last year was extremely difficult and challenging and we paid full attention to the aggressive provisioning.”
Net assets grew 15 percent to 19.5 billion lei in 2009 from 17 billion lei at the end of 2008, the bank said.
To contact the reporter on this story: Irina Savu in Bucharestisavu@bloomberg.net.