Assets reached a new high, of RON533 billion, the loan-to-deposit ratio and the non-performing loan (NPL) rate went down compared with the same period in 2019, and the solvency exceeds 22%.
By contrast, the banking system reported a net profit of over RON5.1 billion in January-September 2019. For the whole 2019, banks in Romania posted a profit of RON6.4 billion.
The bulk of large banks reported lower profits in the first nine months of 2020, compared with the year-earlier period, against the backdrop of the coronavirus crisis, which prompted the setup of larger risk provisions.
The combined net profits of the three largest lenders in Romania – Ban¬ca Transilvania, Banca Comerciala Romana (BCR) and BRD – reached a tota¬l of some RON2.5 billion in the first nine months of 2020, accounting for over half of the profits posted by the entire banking system. The combined net profits of the five largest lenders in Romania reached a total RON3.5 billion, accounting for nearly 78% of the overall profit reported by the entire banking system in Romania.
Return on assets and return on equity stood at 1.17% and 10.48% at the end of September, lower than 1.45% and 13.18%, respectively, reported in January-September 2019.
At the end of the first quarter of 2020, the banking system reached a profit of nearly RON1.6 billion and at the end of the first half of 2020, lenders’ profit grew 1.71-fold, up to nearly RON2.74 billion.
Lenders’ relatively high profits in 2020 came amid a moderate increase in lending and economic decline, due to the COVID-19 pandemic.
In the first nine months of 2020, private lending saw an annual average growth of 5.2%, below the increase of nearly 8% in the same period in 2019.
End-September 2020, lenders in Romania had 3,879 branches and agencies and staff numbers dropped to 52,757, central bank data also show. Compared with the situation at the end of 2019, in the first nine months of 2020, 139 banking units were closed and 349 employees left the banking system, due to the co¬rona¬virus pandemic.
Compared with the peak in 2008, over 40% of the number of banking units vanished and over a quarter of the number of employees left the banking system.
Throughout 2019, a total 323 banking branches and agencies were closed and 631 left the system. The restructuring will also con¬ti¬nue as a consequence of the co¬rona¬vi¬rus pandemic, which accelerated the digi¬talization process and consolidated the local banking system.