Hello and welcome, everyone. It's my pleasure to be with you this afternoon to present our first quarter results. As usual, I remind you that we'll be discussing figures at the group level. They are not audited, though they are prepared according to IFRS standard. Let me start, first of all, by showing the main highlights that you can see on the slide. Of course, it's not a surprise that the credit origination was very strong this quarter. You have seen this already at the banking level.
I would like to stress out that for BRD, it was particularly strong on the corporate side. We give you here one figure to exemplify this, the +28% year-on-year on our corporate loan at the end of March. What we saw is a very good activity both on large corporates and on SME. On SME, I must stress that this is in traditional loans, and also IMM Invest or state guaranteed program. Again, not only, we had a very significant activity on traditional activity. On the retail side, we have growth as well with RON 1.6 billion loan in terms of production.
Of course, the interest rates are high, and it's it is more difficult for certain clients to access credit. This is especially true on the mortgage, less on the consumer loans, where we had strong activity as well. We point out as well the financing of the sustainability transition, and you see that we printed sustainable finance transaction for RON 1.2 billion . This is quite a progress, and we are well, in fact, in advance to our Horizon 2025 target, which was to have more than EUR 1 billion of sustainable finance transactions.
We will be well above this figure by the end of 2025 given the advance that we have already at that point. Commenting on the deposits, +4.2%, you know that we have a low loan-to-deposit ratio. We are below 70%. Therefore, on deposits, we are not trying to acquire corporate deposits at any cost because that would have a negative impact on the net interest margin. We don't need too much deposits. We have enough deposits to finance the growth of our lending activity. This is purely a reflection of the normal growth that we have. Again, we did not take any actions to actively go after deposits.
I remind you, and maybe I should have done that, even before starting, that we felt absolutely no impact from the turmoil that happened in the first quarter on U.S. regional banks. The situation was very stable in Romania, and of course for BRD. Digital channel is something that we follow very closely, as you know, and you remember that last quarter, we were very proud to announce that we had overpassed the 1 million users on YOU BRD. We are now at 1.16 million users, with the number of transactions increasing quite nicely as well, +25% year-on-year. Gross operating income, 22%.
Of course, it's a combination of the increased activity on the commercial side, and therefore on the NBI, as well as the continuous control on our costs. In terms of asset quality, we have a very strong book. The NPL is very low, almost at a record low, 2.6% at the end of March. Well covered, above 77%, in terms of provisioning of the NPL portfolio. Very low cost of risk this quarter at RON 9 million . Finally, therefore, a very good profitability level with a Return on Equity at 19%, for a net profit at RON 340 million , plus 30% year-on-year.
I will now hand the floor to Claudiu Cercel to comment on the macroeconomic environment.
Thank you, François, and good afternoon, everyone. We are indeed very pleased of this performance we had at the level of the bank. We are also pleased by the fact that the Romanian economy continues to show resilience. Finally, that the inflation is showing some signs of abating. Discussing a bit on economy and on the back of the relatively strong showings in the last quarter-Last year, even though it's a bit early to know what happened in the first quarter, actually we'll know that this week, later in the week.
From the macroeconomic indicators with higher frequency, and as cited by the central bank, it would seem that the economy, albeit on an accelerating trend, is performing a bit better than initially expected. Especially the services and trades are showing this better performance, whereas the construction is indeed a little bit decelerating. Mostly decelerating is industry, but that is not unusual in such periods where some of the main trading partners are also experiencing showings. I was mentioning that the inflation, indeed we started witnessing a deceleration. We saw that in February, we saw that in March. We are confirmed lately, we saw even the showing for April that marked a significant slowdown at 11%.
Approaching now the inflation from the to the one single digit territory, anticipated already for some time by the central bank. The same central bank in this environment decided to keep the monetary policy unchanged, and it would seem to confirm that we are already past the peak in monetary policy tightening. The liquidity conditions continue to be good. The liquidity even accumulated more. The latest figure in April even showed an improvement on this RON 26 billion you see here for March. We are now at RON 30 billion excess monetary liquidity in the banking sector. This would explain why the interest rates on the money markets have continued going down.
Most followed indicator of over three-month is now in the region of 6.6%, so significantly less than the peak we saw last year in October at more than 8%. This is indeed good for the economy, but good for the economy are also the programs of support that the government continued to propose. I will not enter into the usually followed programs that we cite. I would mention that since the last time we've met, there are some evolutions, like for example, the setup of the new Romanian Investment and Development Bank.
This is a new thing for Romania, once this bank will be set up, we expect it to be a supporting factor for the economy, galvanizing credits, loans for strategic sectors and why not even combining with traditional lending in such respects. Other types of schemes also appeared in the meantime in the support of, let's say, sustainable economy, but also to people from more vulnerable categories. Wrapping up with the banking sector, it continues to be solid, showing sound levels of capital adequacy and liquidity, whereas the asset quality did not deteriorate. On the contrary, it continued even improving on both NPL ratio and coverage ratios.
Maybe one attention point would be a continuation of the progression of loans in hard currency. This is somehow to be understood, these are cheaper loans than loans. It is supporting the economy, but we noticed also some verbalization from the regulator lately that signaled it is closely following the progression of these loans from a macroprudential perspective. Now we can move further on for a deeper dive in our first quarter results, and I will hand that over to our colleague Maria.
Thank you, Claudiu. Good afternoon, everyone. We start now with our commercial performance. More specifically, we'll dedicate some time on our transformation, digital transformation versus our branch network. I'm on slide 11, if you follow the presentation. On the left-hand side, you can see the progression of our usage of electronic channels, showing the adoption of these tools by our customers. As already mentioned in the beginning in the executive summary, we have already 1,160,000 YOU BRD users. To remind you, YOU BRD is our mobile application for private individuals, which is a very significant growth versus last year.
You see +42% year-on-year. Respectively, the number of transactions through this mobile application and the legacy one have increased by 25% year-on-year. In the meantime, our clients started using the tool for placing their deposits or creating their savings accounts through the tool. You can see that we have already 65% of the deposits and 90% of the savings accounts which are opened directly there. This is as of March 2023. Also the card operations managed through YOU BRD are 57% of all card operations. You can compare that in August 2022 when we launched this feature, it was only 26%. Regarding corporate usage of digital channels, traditionally we are at almost 100%.
Almost all large corporates and SME clients, 99%, respectively 98% using the online channel to perform their transactions. Also on the trade activity, more than 50% of all transactions are executed digitally. 59% of the letters of credit and 55% of letters of guarantee are processed digitally. 67% of the FX trades are also using the e-tool. As I mentioned, for corporate, the digital channels are the main channels. Also our acquiring business grew by 28% year-on-year, which generally is in line with the growth of the business of corporates in the first quarter. Some highlights regarding the development of our mobile application, YOU BRD.
We are very proud to announce that in the meantime, our tool is seen as a good one, including by the store ratings. You can see here we have on average 4.5 as of March, we continue developing it. We have now enabled push notifications for payments, very important, Expresso loan and credit card are now accessible through YOU BRD in a special section for products in the mobile banking. Regarding the network optimization, clearly all this active digitalization is impacting our network optimization. We have already almost 50 branches less compared to last year. As of March 2023, we have 451, which is 48 less than last year.
As a reminder, since we started this optimization in 2016, we have already 44% in terms of number of branches less. What we do in our branches, we target to do more specialized advisory there, while the plain vanilla and more ordinary transactions we entrust to our mobile services. You can see also the strategy reflected in the cashless approach. In the meantime, we have 20% bigger number of points of 24/7 service in that country. To remind and to detail a bit of the lending activity, as said in the beginning by François, we have very robust growth of the lending activity, especially in the corporate segment and especially in the SME segment, where we have growth of 30% compared to March last year.
Not everything is related to IMM Invest. About 30% of our present growth is coming from IMM Invest. However, we are very proud to insist that through this participation in IMM Invest, we have supported more than 750 SMEs and the Romanian economy, reaching four times higher amounts of approved loans versus the Q1 of 2022. Also, the large corporates have performed quite well in terms of lending. You see here also 28% year-on-year. The leasing business, which is very much related to the performance of our SME and large corporates, is up almost 16% on yearly basis. In retail, we registered also important growth of almost 4%, which given the circumstances, we can consider as quite successful. This is outstanding.
In terms of production, we have even bigger figures. As already mentioned, the higher costs coming from the higher interest rates influenced by the inflation have influenced the generation of mortgage activity. It is impacted by this environment, therefore slowing down. However, on the consumer loans side, we are having further uptrend, upward trend, and we are quite satisfied with our achievements. Not to forget, our small business segment posted a growth of almost 20% in the first quarter of the year. Now I'm moving to slide 13, which is reflecting the development of the deposits. In line with the growth of the business, we are having growth of the deposits on the corporate side.
Especially on the large corporates, we have a growth of 22% year-on-year versus March last year. On the retail, 3.6% year-on-year. Once again, as already mentioned by François in the beginning, though we are adapting our pricing policy, we are not in a hurry to attract much more deposits because we feel quite comfortable liquidity-wise, and this is a good opportunity for me to transfer the floor to our CFO.
Thank you, Maria. Just to comment on the, on this slide 13 on the liquidity topic, we would like really to emphasize the fact that we have a very sound liquidity profile. The loan-to-deposit ratio is slightly below 70% at 69.5%. It is indeed growing compared to March 2022 by almost 4 points, which is again proving the dynamism of the lending activity. However, we remain at the reasonably low level of below 70%, it's still low.
It enables us to have a very comfortable liquidity buffer composed of high quality assets, representing approximately 36% of the total assets, with two main components, some cash elements, of course, cash and interbank and monetary obligatory reserve, also a very solid portfolio of government bonds representing approximately RON 17 billion in total, of which RON 14 billion are booked at fair value, including a negative revaluation impact that we see in parallel in the negative OCI of approximately RON 2 million. On top of that, we have also RON 3 billion equivalent of government bonds booked at historical cost in a portfolio hold to collect. Overall, the Liquidity Coverage Ratio is very comfortable above 250%.
In terms of long-term funding, we have our NSFR ratio, very comfortable close to 200%. Again, just to emphasize the fact that our liquidity profile is very sound with a diversified and granular deposit base. Now we can move to the P&L on slide 14, and I'm very glad to comment that it's our best quarter ever in terms of revenue, reaching RON 935 million with strong support from the net interest income and the trading activities. Regarding the net interest income, the growth represents almost +21%, supported both by the very dynamic lending activity. We are growing the volumes by approximately 11% year-on-year, and also very much supported by the elevated level of interest rate during Q1 2023.
Of course, if we compare to Q1, 2022, when we were at the beginning of the rate increase, we have a significant impact of the average interest rate. For example, for over three-month, it is more than 345 basis points on average on the quarter. It is the same regarding the IRCC index, at a level of 5.71% in Q1, 2023, which represents more than 400 basis points compared to Q1, 2022. It enabled to support the growth of growth in prime revenue, which are almost at RON 1 billion at RON 972 million. We have also the cost of funding that is increasing. No surprise, it was completely embedded in our forecast, but it represents now approximately RON 300 million on the Q1.
The second very dynamic pillar of the growth of NBI is represented by the other income, where we have a growth of approximately RON 20 million separated into two components. We have first to remind you a base effect. Maybe you remind that, last year at the end of Q1, 2022, we had to book on impairment on Verpalin, a non-consolidated participation we do have, where we suffered fraud cases, and the cost was fully booked at that time. In Q1, 2023, what we observe is especially the dynamism of the trading activities, especially on FX and also on fixed income, growing by almost RON 12 million, representing +16% growth compared to last year's same period.
The only bitter note we can comment on the revenues is regarding the trend on fees, where we suffer a slight decline of -RON 8 million this quarter, representing -4%. It is explained by mostly two components. First, there is a base effect. In Q1 2022, we, when the war started in Ukraine, some emotions in the country had driven the part of the clients to withdraw a lot of cash, and then we benefited from higher fees from the ATM activity. It is not the case, hopefully, in Q1 2023.
The second element is more structural, is the fact that we have increased significantly the level of penetration of our packages in our client base with a strategy to grow our client base and to be more attractive for new clients with a more competitive pricing with packages. But the downside of these packages is the fact that we collect less fees on the, on the different transactions. Overall, again, an excellent quarter in terms of revenue, RON 935 million , growing by almost 16% compared to Q1 2022. Now if we move to the OpEx on page 15, we are also very proud of what we delivered. We maintained the OpEx well below the inflation. Just to remind you that inflation has reached mid-double-digit figure, around 15% on average during Q1, which is very significant.
Thanks to our discipline and rigorous management of costs, we have maintained our growth, quite below, at 10.5%, including on overall increase on the regulatory contributions, because we increased by in net +RON 7 million for the two contributions with a mixed effect. We had a decrease on the deposit guarantee fund contribution as expected, and an increase on the resolution fund contribution as we were called for a higher rate of contribution. Without the contribution, the overall growth of OpExes, staff OpExes and other OpExes is at approximately 10%, with the two main components as follow. First, the staff cost growing by +9%, representing a bit less than RON 20 million with two components.
Out of these RON 20 million, approximately RON 8 million are explained by a base effect, if I can say so. You can remember that we have a new labor agreement with new benefits, which came into force only in Q2 2022. We have them in Q1 2023, but we didn't have this in Q1 2022. The rest of the growth, approximately + RON 10 million, is explained by the increase of wages, which is partially compensated by the continuous decrease in number of FTEs as we delivered approximately - 150 FTEs at the end of March 2022 versus March 2023, sorry, versus March 2022. Regarding the other expenses, they are under very good control. The growth is fully explained by the increase on IT and related services, growing by approximately 45% on this sub-component.
It is mostly driven by some investments we have to do, also the cost of external services to support the delivery of the IT roadmap. While the other OpEx are under good control, we are slightly declining on real estate costs, on miscellaneous costs, and maintaining flat our communication costs. It enables to deliver a nice growth of the gross operating income, slightly above RON 500 million. It represents a growth of +22% year-on-year with a very nice positive jaws effect, +15 on revenues, while +10 on OpExes, delivering a cost-to-income ratio at 46.2%, which is excluding the contribution to make it more underlying explanatory.
It is a decrease of almost 2 points of the cost-to-income ratio compared to the same period last year. I pass the floor to Philippe Thibault to comment on the asset quality and cost of risk.
Thank you, Etienne. I'm going to be short and dull, I'm afraid. As you can see on page 16, we've got close to zero to report. The cost of risk is at one of our historical lows, with this RON 9 million . The NPA is always very stable. It increased a slight little bit to 2.6%, still with the comfortable coverage ratio. Basically nothing more to say that probably last year when we were looking at the outlook, we were expecting to see due to the increase of raw materials, the inflation, we were expecting to see a tsunami of waiver requests from corporates asking to fix the breach of covenants.
We see, especially for larger corporates that they posted for 2022, very strong results. We see on smaller companies, sometimes, more difficulties. All in all, we don't see new defaults. We don't see our Stage 2 exploding. We see still very good recoveries. Because still we have this inflation situation, we continue to expect a tense or more difficult half semester, second semester, for the retail market, but yet nothing really worrying or no increase of early warning indicators, both in these, on these two markets, retail and corporate market.
Quite a comfortable, dull Q1 if by dull, I'm saying that nothing much happened in the portfolio. Now I'm back to you, Etienne.
Thank you, Philippe. To comment briefly on the capital position. Our capital position is very strong at almost 22% at the end of March 2023, enabling us to fund our growth and of course, to be in a good and solid position to resist any potential shock. The growth year-on-year is 1.5 percentage point explained by the several components. You know, the two main ones being the fact that we suffered the end of the regulatory relief, so-called Quick Fix. We have the full negative impact of the OCI today in our regulatory own funds. It was more than offset by the fact that we incorporated the full profit of 2022. The other components being of course, the growth of the portfolio.
If we compare the variation, since the beginning of this year, it's approximately +1 point of capital adequacy ratio. One last comment on this slide. We have introduced a new indicator for your information. It is the MREL, Minimum Requirement of Own Funds and Eligible Liabilities. To inform you that we have a very comfortable level of this ratio at 31.6% in total risk exposure, expressed in total risk exposure amount. This is comfortably above the intermediary target we received from our supervisor. It is mostly supported by the fact that we have regularly issued some specific instruments, senior non-preferred debt, for a total amount of almost RON 1 billion now in total, since the previous quarters.
We are also very comfortable on this new requirement. Now I pass the floor for the conclusion to Mr. François Bloch.
Thank you. To summarize, we had a very good quarter on the commercial standpoint, with a special mention on corporate business and SMEs in fact. Retail good on the consumer finance market more difficult on the mortgage given the level of interest rate. We continue to increase the number of transactions on stable finance as well as on digital channels. You saw some very nice figures there as well. I can note the performance of the financial market activity this quarter, as well as the good cost control that we had. All of this explain the high profitability for the quarter, the Return on Equity.
One point which is quite relevant these days is the solidity of our, of our liquidity position, capital. We have all the necessary means in order to continue to support the Romanian economy and to further increase our lending activity.