“The banking system is stable and maybe too solvent. The solvency ratio has reached 18.6%. It’s time banks started taking some risks, or else they will become decapitalized. Banks should start lending.”
Total lending stayed in negative territory in the first quarter. The volume of loans banks granted to consumers and companies amounted to RON210 billion, down by more than 3% on the year-ago period.
The top three banks in the system, BCR, BRD and Banca Transilvania, alone posted RON630 million net profit in the first quarter, four times as much as in the year-ago period. Some banks, however, are still in the red because of provisions or serious revenue decline.
It remains to be seen whether the banking system remains profitable throughout the entire year and whether lending returns to positive territory.
Banks posted about RON600 million profit in the first quarter of 2014, which then dropped to RON209 million in mid-year and turned to loss as of September. The banking system posted a record loss of RON4.4 billion in 2014, due to the high provision costs.
(English version by Loredana Fratila-Cristescu)