Romania banking system profitability has been rising in recent years, being double the EU average, but below the values registered in the real Romanian economy, in line with BNR.
On the other hand, Romania is a laggard in Europe in terms of financial intermediation, having the lowest weights of loans and banking assets in GDP.
The loan/deposit ratio in Romania is also quite low, of just 60%, while the European average has topped 100% (107%), with the European recommendation being for the ratio to stand below 100%, according to BNR. The low level of this ratio points to the fact that there’s lending potential on the Romanian market.
As regards the cost/income ratio for the Romanian banking system, this stood at 49.9% in the first quarter of 2023, being below the EU average of 56%.
Also, asset quality has improved in recent years in the case of Romania banks, but the NPL ratio and the ratio of loans under restructuring, though plunging and halving against 2018, are slightly above the EU average level.
(English version by Catalina Apostoiu)