This article first appeared on GuruFocus .
Release Date: October 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Loan portfolio grew 12% year-on-year, driven by large corporates (up 24%) and retail (up 10%), exceeding guidance.
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Net profit increased 7% year-on-year to RON1.176 billion, excluding the turnover tax, with ROE of 17%.
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Asset quality remains solid with NPL ratio at 2.7%, below the market average of 2.9%, and NPL coverage at 67.4%.
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Cost-income ratio improved by 132 basis points on reported basis and close to 200 basis points adjusted, despite doubling of turnover tax.
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Digital adoption continues to grow with 1.9 million UBRD users and digital payments up 22% year-on-year, enhancing customer experience and efficiency.
Negative Points
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Challenging macroeconomic environment with GDP contracting 0.6% year-on-year in H1 2026 and persistent inflation at 6.6%.
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Deposits grew only 2% year-on-year, with corporate deposits declining 6.8%, reflecting a focus on funding optimization.
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Cost of risk increased to 68 basis points in Q3 from 64 basis points in Q2, driven by unsecured lending pressure.
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Fees and commissions were flat, impacted by lower card business income and competition pressure on day-to-day fees.
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Capital adequacy ratio decreased to 21.1% from previous year due to risk-weighted asset growth from portfolio expansion, though still robust.
Q & A Highlights
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Q: How would you characterize BRD's overall performance in the first nine months of 2026 given the challenging macro backdrop? A: The CEO stated that despite macroeconomic tension in Romania and political instability, the bank has been very resilient with solid performance. The loan portfolio grew 12% year-on-year, driven by large corporates (up 24%) and individual loans (up 10%). Gross operating income reached EUR1.7 billion, up 9% year-on-year when neutralizing the turnover tax booked in OpEx. The NPL ratio stood at 2.7%, below the market average, with NPL coverage slightly above 67%. ROE was 17% excluding the turnover tax, and net profit grew 7% year-on-year to RON1.176 million excluding the tax.
Q: What is the outlook for loan growth for the full year 2026? A: The executive presenting commercial results noted that with year-over-year loan growth of 12.4%, the bank is on a good track to probably slightly exceed its guidance of high single-digit loan growth by the end of the year. Lending dynamics remain very resilient and continue to grow double-digit despite the environment, supported by both retail and corporate segments.
Q: What drove the increase in cost of risk in Q3 2026, and does it signal asset quality deterioration? A: The CRO explained that cost of risk reached 68 basis points in Q3, slightly above the 64 bps in the previous quarter, bringing the nine-month level to 58 basis points, in the upper range of guidance. He emphasized this should not be interpreted as broad credit deterioration. Retail is the main contributor, concentrated in unsecured lending, while secured lending and mortgages continue to perform very well. Corporate remains much more benign. The bank remains deliberately prudent and forward-looking, carrying management overlays representing more than 25% of provisions and integrating updated macroeconomic assumptions in Q3.
Q: How did the funding structure and deposit strategy evolve in Q3 2026? A: The commercial results presenter said deposits grew only 2% year-on-year as the bank optimized its funding structure and better deployed resources toward lending. The bank focused on growth in private individual deposits, which are the most valuable for funding, while deliberately declining corporate deposits by 6.8%, mainly less valuable fill deposits. The loan-to-deposit ratio reached 81.8%, up 7.6 percentage points year-on-year, a level considered stable from a long-term perspective. The liquidity coverage ratio was 165%, stable within risk appetite and regulatory limits.
Q: What is the status of BRD's capital position and its ability to support future growth? A: The presenter on capital position reported a capital adequacy ratio of 21.1% in Q3, representing roughly 230 basis points of management buffer above the total capital requirement. The year-over-year decrease was mainly driven by growth in risk-weighted assets from portfolio expansion, partially offset by retained earnings from 2025 and a mild improvement in OCI. The capital position remains robust, able to support growth going forward and safely above regulatory limits.
Q: How are digital adoption and the omnichannel model progressing? A: The commercial results presenter reported 1.9 million UBRD users at Q3, with payments through digital channels up 22% year-on-year. More than 56% of unsecured consumer loans are granted online. The bank introduced fully digital end-to-end RCA car insurance, new use cases with Transfond on the national scheme, and predefined treasury payments. The digital space is complemented by a best-in-class call center and an optimized physical footprint, with 22 fewer branches year-on-year, helping reduce and optimize the cost base.
Q: What drove the cost performance and cost-income ratio improvement? A: The commercial results presenter said OpEx stayed flattish year-on-year despite the doubling of the turnover tax. Staff cost optimization fully offset the growth of the turnover tax and other costs, which are mainly driven by IT investments and depreciation. Savings in physical footprint, logistics and real estate kept other cost growth visibly below inflation for the first nine months. The reported cost-income ratio improved by 132 basis points, and the adjusted ratio excluding the turnover tax improved by close to 200 basis points to around 42.8%.
Q: What is the macroeconomic backdrop in Romania, and how does it affect the banking sector? A: The macro presenter noted GDP contracted 0.6% year-on-year in the first half of 2026, though the quarterly picture showed some stabilization. The budget deficit improved to slightly above 3.8% from 5.5% a year earlier, a fiscal adjustment of roughly 5 billion euros, but the current account deficit remains elevated at an estimated 6.7% of GDP. Inflation was 6.6% in September, expected around 6% at year-end, with the policy rate unchanged at 6.5%. Despite this, the Romanian banking system remains fundamentally strong, with capital adequacy at 23.6%, liquidity coverage near 230%, a loan-to-deposit ratio around 69%, and system NPL at 2.9% with coverage above 62%.
Q: How is BRD progressing on its ESG and sustainable financing commitments? A: The CEO said the ESG commitment remains a priority across business segments, supporting clients' transition. As of end-September, the bank had EUR2.83 billion in sustainable financing, exceeding its targets for this year and for the entire strategy period ending next year. In Q3, the bank also participated in a consortium providing structured financing of more than half a billion euros to Damasolar, a key photovoltaic project in Arad County.
Q: What drove net banking income growth, and how did fees and other income perform? A: The commercial results presenter reported NBI growth of 2.7% for nine months, driven by net interest income supported by double-digit lending growth and funding structure optimization. The net interest margin improved versus the previous quarter and reached roughly the level reported at end-2025, significantly better than Q1 and Q2 2026. Fees and commissions were flat-ish, normalized between quarters after additional card-related income in the prior quarter, with decreased competitive pressure on day-to-day maintenance fees. Other banking income grew almost 11% year-on-year, though Q3 growth was tempered by market volatility and lower financial market results.
Q: What is the status of the
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
