At the same time, no bank seems to be gathering enough courage to submit more friendly lending norms to the central bank’s approval to bring clients back to their branches. Banks have the freedom to adjust norms within the general framework set by the central bank, but they are still highly wary of taking up risks.
The banking industry has exited the crisis with an 18% narrower territorial network against the peak of 2008 and with 13,500 fewer employees (a 20% decline against the peak), but it’s still unable to forge a sound trend of restoring profitability.
And while part of operating costs were cut through layoffs, the net average salary per bank endured during the crisis, hitting a high of 4,628 lei (EUR1,050) in April.
The pre-crisis two-digit return on equity (ROE) is still just a memory for the banking system, which is still unable to reach an operating performance that should allow it to more easily absorb the cost of non-performing loans.
At the end of March, the ROE for the overall banking system was 6.3%, after it was close to zero in 2013, as the aggregated net profit reached just RON49 million.
Almost one in five bankers left the industry against the over 71,000 peak reached in 2008 ahead of the crisis onset, but at that moment profit per employee topped RON60, before going below RON1 at the end of 2013.
The first to go were employees of territorial units, while central office employees were retained, with the total revolving around 20,000. After the amount had dropped below this threshold in late 2013, the first four months of 2014 brought a move to increase central office personnel.
At the end of April, the banking system had 58,000 employees left, similar with the 2006 level. The difference is that assets per employee stand at over RON6,000, double the level of eight years ago.
Less than 100 banking units were closed in the first four months of this year, with around 5,400 being left as large banks shy away from shutting down any more units following the emergence of first signals of a pickup in demand for retail loans.
(English version by Catalina Apostoiu)