BRD-GSG 2Q 11 RAS results

BRD-GSG did not provide an explanation for the evolution of the risk costs, but part of this decrease is due to their pro cyclical nature, the bank mentioning recently the NPLs formation has slowed down. NIM has improved from 1Q 11 on the back of higher EURIBOR and the cut in reserve requirements for FX. F&C and trading results were weaker while the decrease in operating profitability was amplified by seasonal factors related to personal expenses. We view these results as positive at a first glance but we remind that under IFRS risk costs are not expected to decrease that fast, therefore, investors should pay attention to the weaker operating profitability.

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