The European Bank for Reconstruction and Development (EBRD) reported that it concluded the past year with a net profit down by a fifth compared to the previous year due to significantly lower returns on equity investments.
In 2017, EBRD’s net profit plummeted by 22.2 percent to 772 million euros, according to the preliminary report released by EBRD on Tuesday.
The bank attributes this result to lower returns on equity investments, which also fell by 22 percent to 332 million euros. However, last year’s net profit is still above the average of the past five years, which stands at approximately 620 million euros.
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EBRD’s financing grew modestly by 3.2 percent last year to 9.7 billion euros. A record 412 individual projects were financed, nine percent more than in 2016, the bank’s report shows.
Realized profit before write-offs stagnated at the level of the previous year, amounting to 634 million euros. The bank highlights a decrease in the share of non-performing loans in the total loan portfolio by 1.6 percentage points to 3.9 percent at the end of 2017, thanks to repayments, write-offs, and the reclassification of certain loans to performing status.
“The improvement reflects an environment of relatively mild risk and effective active portfolio management,” the statement notes.
Net interest income stagnated at 754 million euros, despite early signs of margin declines in several markets, EBRD emphasizes.
