Increased assets and net profit reported by Romania's CEC Bank in the year 2024.
Rewritten Article:
CEC Bank's prosperity soared in 2024, with a whopping 19% surge in assets compared to the previous year, skyrocketing from 83.61 billion lei to an astounding 99.33 billion lei. The bank's net profit followed suit, boasting a massive increase to 687.9 million lei.
Diving deeper, the bank's net profit was composed of a staggering 668.2 million lei from CEC Bank's own operations. To put things in perspective, this was a significant leap from the 515.8 million lei recorded in 2023.
Net interest income enjoyed a scorching 30% jump in 2024, jumping around RON 483 million. This growth was primarily due to the constant expansion of the bank's loan and placement balances on a monthly basis. Market interest rates remained steadfast at exorbitant levels, leading to a sizable rise in interest income of approximately RON 1.149 billion. However, interest expenses also witnessed an upward trend, with a variation of around RON 666 million.
Net fee and commission income experienced a more modest but still substantial 11.6% increase, amounting to roughly RON 32 million. This rise was mainly attributed to a 70% surge in fees generated by FGCR, stemming from enhanced participation in government programs.
Administrative expenses saw a sharp increase of approximately 24.3% compared to the same period in 2023. This escalation was primarily attributed to the imposition of the additional turnover tax. In the absence of this tax, the increment would have been only about 12.9%.
As a result of these developments, the cost-to-income ratio at group level improved noticeably, standing at 48.53% at the end of 2024, in contrast to 50.6% at the end of 2023. Eliminating the impact of the additional turnover tax, the cost-to-income ratio at bank level would have been a more impressive 44.87%.
The return on equity (ROE) at group level showed a considerable improvement, reaching 13.35%, compared to 12.35% at the end of 2023. Excluding the influence of the additional turnover tax, ROE at bank level would have been a striking 15.18%, indicating a marked enhancement in the bank's profitability compared to 2023.
CEC Bank made a powerful statement on the capital market in 2024, triumphantly placing a new benchmark tranche under its EMTN Program worth a colossal EUR 1.5 billion. This EUR 300 million tranche earned a BB rating from Fitch, in line with the bank's IDR rating. The strong demand from investors was evident, with receipt orders repeatedly oversubscribing the initial announcement of EUR 300 million, primarily from international investors.
Spanning over 158 years since its inception in 1864, CEC Bank is the country's longest-standing financial institution. Its extensive network exceeds 1,000 branches and territorial units, making it the most extensive in Romania.
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(Photo source: press release)
Enrichment Data:
- In 2024, CEC Bank demonstrated a remarkable financial performance, with substantial growth in assets and net profit.
- Net interest income increased significantly due to the expansion of loan and placement balances, while interest expenses similarly rose.
- The bank's net fee and commission income increased predominantly due to a rise in fees from FGCR, driven by accessing higher levels of government programs.
- Administrative expenses saw a substantial increase, primarily due to the imposition of an additional turnover tax.
- The cost-to-income ratio improved compared to the previous year, and the return on equity (ROE) rose as well, both indicating better profitability for the bank.
- CEC Bank's participation in the capital market was evident, as it successfully placed a new benchmark tranche under its EMTN Program worth EUR 1.5 billion in 2024.
Sources:[1] CEC Bank official press release.[4] Romanian APEE and CEC Bank announcement of syndicated loan for Electrica.
CEC Bank's impressive growth in 2024, evident in the 19% surge in assets, was accompanied by a noteworthy increase in net profit to 687.9 million lei. This expansion in business was reflected in various aspects, such as the rise in net interest income due to the expansion of loan and placement balances, the increase in net fee and commission income primarily from FGCR's enhanced government program participation, and the placement of a new EUR 1.5 billion benchmark tranche under its EMTN Program in the capital market.
