Ladies and gentlemen, good morning and welcome to the BRD Group Fourth Quarter and Full Year 2022 Preliminary Financial Results Conference Call and Webcast. This conference call will be recorded. We have just a few announcements before we begin today's presentation. The event will last approximately one hour. The slides will advance automatically throughout the presentation. At any time during the webcast, you can press star one, one on your telephone keypad to enter the queue for the question-and-answer session.
Your host today will be Mr. François Bloch, CEO, Mr. Claudiu Cercel, Deputy CEO, Financial Markets, Mrs. Maria Rousseva, Deputy CEO, Global Corporates, Mr. Philippe Thibaud, Deputy CEO, Risks, and Mr. Etienne Loulergue, Deputy CEO, Finance & Treasury. I will now hand over to François Bloch. Sir, the floor is yours.
Thank you, welcome everyone to this presentation of our 2022 results. We presented them at the board of director on 7 February 2023, as you know, at this period of the year, they are not yet audited. That will come later. If I go straight to the introduction, 2022, we mentioned here as a challenging year, and indeed, it was challenging. It started from a very positive trend. You remember that we were exiting the COVID pandemic, and we were all very optimistic about the year. Unfortunately, starting end of February, the war started in Ukraine and the macroeconomic environment shifted quite remarkably.
However, during this year, we have been able to overcome this difficulty and, improving the commitment and the solidity of the bank. I will demonstrate that through first the commercial activity, with excellent results on the production of loans on all segments, retail, corporate, and you see here, a few figures, with the overall portfolio growth, 10% year-on-year. Corporate loans, positive 26%, with, remarkable, performance on the SME sector.
While doing this, we also, continue to increase our presence on sustainable financing, on green financing, but not only green, overall sustainable, reaching more than RON 1 billion in production, this year.
We are well on target to achieve our 2025 objective, which I remind you, was to be above EUR 1 billion cumulative financing in the sustainable finance by the end of 2025. The loans again were very dynamic. The deposits grew as well by 7.5%. At the same time, we continue our trend on the digitalization of the bank and the usage by our clients with now reaching over 1 million user on our new platform YOU by the end of 2022. We will see later as well that we have significantly increased the number of transactions.
The GOI, the gross operating income, grew by 14% driven by volumes, rates, and discipline on costs. Regarding the quality of the balance sheet, our NPL ratio is very low at 2.5%, whereas we are well covered with a coverage ratio of 77% in terms of provisioning level. Nevertheless, we will probably go more in detail on this, we decided to pass additional provision on our sound portfolio. We didn't have so much new defaults, but we consider that as the situation is still uncertain with high inflation, high interest rates, that could cause difficulties for some of our clients.
We decided to pass additional provision and therefore we have RON 95 million provision this year. All of this at the end equates to a profit of RON 1.3 billion, slightly higher than last year, with return on equity at 16%, so well above our 12% guidance. If I move now to the next slide, you will see a couple of awards that we received in 2022, but I will not spend too much time on this and leave the floor directly to Claudiu Cercel to tell us more about the macroeconomic environment. Thank you.
Thank you very much, François, and good morning to you all. The performance mentioned earlier by François, the performance of the bank took place in an economic environment characterized by resilience, even though the inflation was a real challenge. We do not yet have the final figures for the GDP growth rate for 2022 .
But we have the statement coming from the prime minister showing that this indicator marks an increase of 4.9%. Indeed, it's a deceleration comparing to 2021. Yet in satisfactory territory, with the main driver in the first part of the year being rather the consumption, so the services sector, which saw some deceleration in the second part of the year, in which period the main driver of growth became the gross fixed capital formation, so the investments.
At the same time, as is structural in the Romanian economy, the net exports remained a drag, with current account deficit showing a significant increase at 9.5% to GDP compared to 7% in 2021. Also on the positive front, the budget deficit marked an improvement, the country is continuing its fiscal consolidation. 5.68% of GDP in 2022 compared to 6.74% in 2021. Even though I mentioned earlier that the inflation was a challenge, apparently, we are now past the peak in inflation. We may have seen the inflection point in November when the indicator touched almost 17%.
It went a little bit down in December at 16.4%. According to the statements we see from the central bank, we would embark now on a gradually decreasing path in inflation, hoping to be again in the single digit territory in the second half of the year and maybe ending 2022, 2023 in the territory of between 7% and 8%. In this inflationary environment, obviously, the interest rates went up, propped up also by the hiking policy of the central bank that delivered 575- basis points in hiking power in 2021. It continued even increasing rates in January 2023, but by a lower degree, by 25- basis points.
The consensus, the analysts, would seem to be that this was the last one and now, we saw the peak in the monetary tightening policy of the central bank. At the same time, the liquidity conditions, which were very tight till October, roughly beginning of November, started easing. This is attested by a lower recourse of banks to the refinancing operations of the central bank via mainly Lombard. The significant surplus of liquidity already in December at RON 11 billion, which continued in January. It was even higher at close to RON 20 billion.
This also had an impact on rates after having increased significantly in 2022 and having even attained a peak in ROBOR at 8.2% in October. It started gradually going down. ROBOR three months, for example, which is the main benchmark, it's now at 7.14%. Probably in this context of still attention being paid by the central bank of the inflation, we will stay at the current level for at least the first half of the year. Indeed, the inflation and the interest rates going up may be considered as a certain drag for the economy.
Luckily there are these supporting programs offered by the government with the European funds being the main anchor. The government continue will with these programs also in 2023, the main one being IMM Invest, which is dedicated to local companies. Also, with some schemes to help Romanian companies in coping with either the shocks coming from the Ukrainian war or with shocks coming from the energy prices going up. In this environment supported by the government with these various programs, the banks are well positioned to capitalize on opportunities.
They continue showing, good liquidity position and still adequate, the capital position in spite, let's say, of the challenges, having, being felt, via mainly, the interest rate going up and affecting the AOCI positions, in their capital. At the same time, the risk profile, continue to be sound, with most metrics, in positive, territory, historically speaking, but also if compared to the averages of the European Union. That would be in a nutshell on macro. Thank you very much. I would now hand on to my colleagues to continue on the commercial performance. Thank you.
Good morning also from me. I will focus on the commercial performance in 2022. We'll start with the digital adoption and usage of our digital tools by both retail and corporate clients. As you can see on the slide, we have significant growth of our mobile banking users for retail. You see above 1 million users, which is a growth by nearly 50%, 46% year-on-year. Regarding the transactions which have been performed in terms of number on the mobile, through YOU BRD and MyBRD, we have a growth of 12% compared to 2021.
Traditionally, on the corporate side, we are exclusively digital, and we have 99% of the corporate clients, bigger corporate clients, and 97% of the smaller SMEs, transactions being performed via digital channels. As you can see, we have also very robust and serious performance in digital on the trade finance, where we are a recognized player in the market and actually, a pioneer on this market. Regarding the FX business, on the corporate side, 67% of the FX transactions have been performed through digital tools.
Also, strong performance on the transaction, in terms of acquiring, 21% growth year-on-year, marking RON 200 million in terms of volume on acquiring transactions during 2022. What is new on the products and services side in the digital tools? You can see here we have two important new entries into the product portfolio accessible through YOU BRD. On the one side, we have the credit card being possible to be issued through the interaction with the online banking or through mobile banking. Also, the instant payments for private individuals, which have been introduced in 2022.
Also, regarding consumer lending online, the bank has increased the number of transactions of customers which are initiated that way. Regarding the personal data update and onboarding, we have a serious improvement on the both mobile banking and the website solutions which enable clients to perform this activity digitally.
On the contact center sales and efficiency, you can see we have 31% growth of the products sold directly and 61% growth versus last year of the meetings which have been organized by the contact center. In total, 1.9 million calls received through the contact center show the importance of this channel for our clients. Regarding the size and right sizing, let's say, on our branch network, which is also connected with the digital adoption, you can see we have decreased the number of branches by 36% in 2022 compared to the previous year.
And presently, we have 460 branches. As a reminder, throughout the program for resizing of our network, we have started in 2016. We see a decrease of 43% in total. All this, as I already mentioned, is linked to the speed and rate of adoption of the digital tools so that we are able to deliver proper service to our clients. The last point on this slide, we have in the meantime, 152 self-service points where our clients can cashless deal with their accounts. On the next slide, related to the lending business.
As already mentioned by my colleagues, we have a really remarkable growth on the corporate lending activity, notably on the SME side, by 43% in terms of outstanding in 22 December 2022 versus last year. We have remarkable performance regarding the support of the SMEs under the IMM Invest program in 2022. We managed to support 2,000 SMEs and to grant, approve, actually, loans to them in total amount of 2 billion lei. All these loans have been approved in 2022 or by almost 70% higher volume compared to 2021.
However, a portion of them will be still utilized because many of them are investment loans. Regarding the large corporate portfolio, where we are traditionally strong, we have also a very remarkable growth of almost 19% of the outstanding year-on-year. Same being valid also for the leasing activity, very strongly supported by our SME client base. 15% year-on-year growth here.
Not to forget to mention our sustainable or green finance or sustainable loans in 2022. On the corporate side, we have RON 590 million new loans approved. Together with the retail loans of sustainable nature, we have more than RON 1 billion, as already mentioned by my colleagues. One innovation related to sustainability is the introduction of the Euromentor Initiative, which is targeting to advise our clients, but the smaller and the SMEs of course are more important from this perspective regarding the capacity to adopt and to access the EU funding.
Retail lending also extremely strong with RON 7.5 billion new loans production for the private individuals in 2022. Both the housing and the consumer loans performed strongly, while the consumer loans have the second-best year in terms of production. The housing loans by growing 58% versus the previous year marked a record in terms of production for BRD. Also to mention in the retail side, we have introduced two new products of a green nature, which enabled us to produce almost RON 500 million of sustainable retail financing.
Contributing to the roadmap, as you can see on the next slide. I'm already on the slide related to the green finance and support the sustainable economy. You can see some details on both the retail and corporate business, with some names which are mentioned related to particular transactions we arranged and structured as green deals in the real estate business on the corporate side. We have a total financing of EUR 120 million now expressed in euros on the corporate and EUR 96 million on the retail.
As you maybe remember, until 2025, we have to produce EUR 1 billion sustainable finance. We are well advancing towards this target. Not only financing but also the spreading and educating and increasing the awareness of society has been our target in 2022.
Most notably the Climate Change Summit, which we organized in the autumn, with a very big participation and audience rate. In fact, it has been the major sustainability event in Romania, co-financed and co-founded and co-organized by BRD, with the participation also of many of our experts in the panels. You can see further aspects of our green finance and green activity recognition. We have been announced leader in green finance in Romania and sustainable finance solution provider, by different magazines. Moving to the next slide, which is displaying the deposit base.
Similarly to the growth of the lending activity, we have a very serious, very important growth of the deposits, 17%, as you can see here, year-on-year, driven by the large corporate, at 40% year-on-year and retail deposits growth of 3%, year-on-year. This, it ensures, of course, very comfortable liquidity basis for the bank, with the loan to deposit ratio at 66% and very comfortable liquidity buffer of 35% of our balance sheet. You can see also on this slide that we have performed some innovations on the savings side.
We have a quite good offer, which is not only consisting of deposits but also asset management solutions. You can see the products we have introduced. And, uh, last but not least, we, uh, BRD has been very active, as usually, in the Fidelis program, uh, of the government, uh, with forty-one percent, uh, market share, um, to, uh, distribute the Romanian government bonds, uh, to our private individual clients. Thank you. And now I'm passing the floor to Etienne, our CFO.
Yes, thank you, Maria. Good morning, everyone. I will comment on slide 16 on the P&L, let's start with the net banking income. On net banking income, I'm very glad to comment that we had a very strong dynamic of revenues in 2022, based on two pillars. A very intense commercial activity with the growth of the portfolio, as mentioned previously, plus 10% of the loan portfolio. Also, completed with rising interest rate, with a very positive effect on our revenues.
The total growth of NBI on a year-over-year basis plus 12%, meaning RON 400 million, driven especially by the net interest income, plus RON 300 million, meaning plus 14% year-on-year. This growth of the net interest income is driven, again, by the volume effect with the growth of the loan portfolio, and the rise of interest rate. Of course, first the ROBOR three months with more than 400- basis points year-on-year, but also by IRCC, which is following the ROBOR three months pattern with a two quarters delay approximately.
Nonetheless, one point of attention in the net interest income, we also start to feel the cost of funding increasing, with the rising volumes of term deposit and the increase in pricing of the term deposit in the context of changing the behavior of client, when they can, they try to save more and deposit more on their term deposit.
We are also in a competitive landscape where we had to adjust our pricing of term deposit on a regular basis. The second driver of NBI is the mix or other incomes with a very solid growth, positive 25% approximately on a full-year basis, and very remarkable quarter four with almost positive 66%, driven by excellent activity in both sales and trading and in terms of product, first on FX, but also on fixed income products. The last component in terms of growth of the net banking income are fees with a mild plus 1.5% approximately year-on-year.
This is driven by the growth in the volume of transaction in Monétique Center , and also higher penetration of some value-added products like health insurance products. It is partially offset or counterbalance by lower revenues in asset management. It was indeed a challenging year in terms of volume for the asset management in this context of rising interest rates and decreasing value of bonds. We are collecting, but it's completely conscious and consistent with our strategy.
We are collecting less fees on e-banking than some of other contact transactions as we offer now to our clients the free of charge mobile application and package on U-Ready. Overall, a very significant growth of the revenues plus 12% year-on-year. We move to next slide 17, to comment on the operational expenditure.
The first comment is that we had to cope with a strong inflationary context, but we deliver a very solid management of the expenditure, and we continue our rigorous discipline. Overall, the growth of OpEx in 2022 is approximately positive 9%, which represent RON 150 million approximately, out of which RON 20 million are explained by the higher contribution to deposit guarantee fund and resolution fund on which we have no direct control. We are called by the fund managers. The second part of the growth is related to staff expenses with plus RON 70 million on a full-year basis, representing 8.5%.
It's the combination of several effects. We have the underlying regular effect of the wage increase, of course. On top of it this year, we have some exceptional items. First, we had an excellent commercial performance, which led us to increase the envelope for variable remuneration. We have for 2022 a slightly higher variable remuneration envelope.
Second, we had in the context of high inflation a negotiation on the collective labor agreement with the unions, which drove to the decision to increase several other benefits, and especially the meal tickets average, which has a significant increase in the staff cost base. Last one, it's a completely exceptional item. We have decided to grant an extraordinary premium to address the problem of inflation to support our staff with a specific cost booked in fourth quarter.
The growth you see for our staff cost in fourth quarter, which is quite impressive, plus 18%, representing approximately RON 38 million, is driven firstly by these exceptional items, this exceptional premium and the adjustment of the variable remuneration envelope. We have, of course, the underlying growth. Moving to the other OpExes, the discipline remains very good. The growth year-on-year is positive 8%, representing approximately RON 60 million, and it's driven by several components.
Of course, we had to suffer some increase in prices due to inflation, especially in utilities, which is visible in the fourth quarter particularly. Also, we had to continue to accelerate the delivery of our digital roadmap, and we continue our effort in IT.
The overall spending both OpEx and CapEx for IT purposes in 2022 were in growth of approximately 50% compared to 2021. Nonetheless, in terms of gross operating income, the growth is excellent, and we plus 14% in 2022 with an acceleration in fourth quarter with 17% growth fourth quarter 2022 versus fourth quarter 2021. It enables to deliver a positive jaws effect and a decrease of the cost to income ratio to slightly above 50% on a full-year basis, declining by more than one point compared to last year. Now we move to the asset quality and cost of risk. I pass the floor to Philippe Thibaud.
Thank you again. Good morning to you all. This quarter is still a very strong, a very good quarter. In terms of cost of risk, you will see that there is indeed a slight increase in fourth quarter of our provisions, which reflects a very conservative approach due to the uncertainties. Claude, you talk about comforting outlook on the inflation, yet the inflation level is very high. One of the things which needs to be underlined is that when we look at all our metrics, we see that early warning indicators are getting more turbulent.
We see some months or some from week to the other week, we see indicators going up and down, and it's a bit explaining why we still have. It's explaining why we still have this conservative approach due to the uncertainties and the impact, especially the impact on inflation, on the default rates. Today, what we see is that the portfolio is very, very resilient. We don't have new defaults or barely any new defaults, so that actually the impact on the cost of risk in terms of the stage three impact is negative. We recover more than we have inflows.
Still on the performing portfolio, when we look at the S1, S2, we can see that there is a slight shift from S1 to S2, reflecting the uncertainty, the early warning indicators. That means that at the end of the year also, we reflected this in our management overlay. The level of provisions that we have includes for a large part these overlays on top of DGS. You can see on the slides, indeed the net cost of risk at 52- basis points at the end of the year, but this is reflecting these managerial decisions to have this more conservative stance.
Globally, through the quarter, we had a very stable and a very comfortable cost of risk, actually close to zero. That brings us to the NPL level, which is historically low at 2.5%. We are very, very comfortable. We feel also that, in any case, should the default rates rise, we would be capable of managing the NPL properly. We have a very comfortable coverage rate, which is something like 12 points above the Romanian average standard. All in all, we are very cautious, but very comfortable with our credit risk. On this, I'll pass the floor back to Etienne.
Yes. Thank you, Philippe. Slide 19, to comment on the capital position. You can see on the chart on the right side that the capital adequacy ratio as of the end of December 2022, stands at 21%. This is a computation of the capital adequacy ratio without the benefit of the Quick Fix. You remember this Quick Fix enabled us to discount part of the negative impact of OCI in the Prudential Own Funds. It was still valid on the 31 December 2022. Nonetheless, to give you a better picture of the situation into which we enter in 2023, we have decided to present the figure without the Quick Fix benefit.
Without this Quick Fix benefit, the capital adequacy ratio stands at 21%. If we compare the evolution versus the end of December 2021, we have four main items explaining the change. The first one is, of course, the full impact, the full negative impact of OCI into the Prudential Own Funds, approximately minus 700- basis points. Followed by the fact that we have to fund our growth of the loan portfolio, and we had the growth of the RWA for approximately positive 9%, totally consistent with the growth of the portfolio of loan of 10%.
The growth of RWA had an impact of approximately minus 200- basis point into the capital adequacy ratio. To compensate these two negative impact in the capital ratio, we have taken two decision. The first one to issue a subordinated loan with our mother company, Société Générale, which is a tier II instrument, for EUR 150 million in June, it had a positive impact of positive 250- basis points in the ratio. In complementary, we have decided also to incorporate the first nine-month profit, approximately RON 1 billion, into the Prudential Own Funds, representing more than 330- basis points additional in the ratio.
At this stage, I would like to take the opportunity to add a comment on the dividend. We have decided to also incorporate the fourth quarter result into the own fund, therefore, to distribute no dividend coming from the profit of full year 2022.
This additional incorporation of the approximately RON 300 million of net profit in fourth quarter will increase the ratio by approximately 80- basis points additional. We believe it is really important to do it because we are still in a context with a certain risk of volatility in the long-term yields on which our OCI are very sensitive.
As a matter of fact, there is no longer a CRR Quick Fix, so our sensitivity to the yields is even higher. Maybe you remember that before we commented that additional 100- basis points in the long-term yields will drive to minus 100- basis points in the capital adequacy ratio. In fact, this sensitivity has almost doubled.
Without the quick fix, if the long-term yields increased by 100- basis point, we risk to deteriorate much more the capital adequacy ratio. Our level of uncertainty is increasing. That's why we want to address this risk and wait to have a better visibility on the context before making any commitment on the dividend. Moreover, we have received some very clear recommendation of prudence coming from the National Bank of Romania in a context where the National Committee for Financial Stability, and also some European institutions, are calling the banks for utmost prudence regarding their own funds.
In this context, we believe it completely makes sense to incorporate the full year result. Last point, very important, we want to remind you that BRD has proven its commitment to come back on the long term on a regular and consistent payout policy. We have it in mind. We have already proven our capacity to do it when the conditions allow it.
Recently, at the beginning of 2022, after the ban on the dividend in the COVID pandemic was lifted, we have distributed according to our consistent practice, and we distributed RON 1.6 billion beginning of 2022, coming from the return earnings of the profits 2019 and 2020.
Please believe that we have still this policy in mind. We will come back to it as soon as the conditions will enable us to make it in a full security. I will wrap up with the conclusions. On slide 21, if we summarize 2022, this year was rather complex due to the geopolitical events in Ukraine, triggering some volatility in the economic environment, especially marking historic level of inflation, more than 16% in Romania. Nonetheless, the commercial activity of BRD was very solid with a strong momentum of loan production in all business lines.
Growth of the portfolio in plus 10%, driven by extraordinary performance of corporate positive 26%. In the production of private individuals, some records were reached in housing loan production, and still a very solid production in consumer loans. We continue to deliver our roadmap on various value strategic initiative. The sustainable positive finance impact loans reach more than RON 1 billion in 2022.
We have also a solid momentum in the financial market activities, and we continue to deliver in digital solution, increasing the scope of services and the penetration in our current base with more than 1 million active client on YOU. The financial performance is very good with a positive jaws plus 12% in NDI, while only plus 9% in OpEx, enabling to deliver gross operating income growth of 14%, despite, again, an inflationary context.
Bottom line, the return on equity reaches 16%, improving by several points compared to last year, while we maintain an excellent quality of our portfolio and balance sheet with a historically low level of NPL, solid capital adequacy ratio, and comfortable liquidity. We are solid to deliver our banking activity in 2023. Thank you.