Net interest income, the most important profit resources banks have, continued to increase in 2019, following a lending rebound and the decision of some lenders to hike loan interests faster as the money became more expensive to get on the interbank market, without raising deposit interests as fast.
Interest expenses on deposits were 5.2 times lower last year than the loan interest income. The high spreads have been a significant feature of Romania’s banking system’s business model in the last few years, as noted by Romania’s central bank in its reports.
Banks got more than RON18.8 billion income from loan interests in 2019, 12.3% more than in 2018. Interest expenses on deposits made by customers stood at RON3.58 billion at the end of 2019, 21.8% higher than in 2018, according to central bank data. Under the circumstances, the net interest income reached RON15.2 billion, 10.3% higher than in 2018.
Operating income went up 8.25% year-on-year to RON10.63 billion in 2019. Net income from interests and fees reached RON19.4 billion.
(English version by Loredana Fratila-Cristescu)