Romanian banks posted a cumulated net loss of RON 204 mn in Jan-May 2010

According to the same sources, during 1Q 10 the banking system made a profit of RON 415 mn (EUR 100 mn), compared to a loss of RON 210 mn (EUR 50 mn) a year before. We view this development as negative, especially due to the magnitude of the bottom line reversal. Several facts have probably triggered this reversal: a deteriorating economy, higher provisioning requirement under RAS and even seasonal patterns. While we reckon that the risks for our two covered banks, BRD-GSG and Banca Transilvania (TLV) have increased to the downside, we do not see them as major contributors to this evolution. In 1Q 10 the two banks posted a cumulated net profit under RAS of RON 215 mn.