Romania's second-largest bank BRD-Groupe Societe Generale SA (BRD.RO) Monday reported a 39% drop in first-quarter net profit, as higher risk costs offset an improvement in operating income, news agency Mediafax reports.

The bank posted a net profit of 83.4 million lei (EUR19 million) for the January-March period, compared with RON137.1 million a year earlier.

BRD, which is majority owned by France's Societe Generale SA, said the net cost of risk rose to RON336.7 million in the first quarter from RON213.7 million in the year-earlier period as continuing difficult economic conditions weighed on the quality of assets.

The bank posted operating income of RON767.3 million, up 6% on the year, as fees and commission income remained stable, while revenue from interest rose 4.6% in the first quarter. Operating costs fell 2%.

BRD's total assets amounted to RON46.6 billion at the end of March, compared with RON48.7 billion in December 2011.

The loan portfolio totaled RON34.3 billion in March, up 5% on the year, while deposits grew 8.1% to RON31.6 billion.

The bank's network comprises approximately 940 units.

BRD shares traded down 0.76% in Bucharest, in line with the market's decline.

Agency website: http://www.mediafax.ro