The banking system’s profit in 2016 stood at some RON4.2 billion.
Return on assets and return on equity stood at 1.32% and 12.68% at the end of 2017, up on 2016, but below the 2008 level. Considering the ROA and asses, the profit of the banking system reached RON5.64 billion in 2017.
The profits two of the major banks, Banca Transilvania and BRD-SocGen announced so far, account for about half of the profit of the entire system last year. BRD-SocGen, the third largest bank by assets, posted a record profit of RON1.38 billion, its best ever, while Banca Transilvania, the second largest by assets, posted RON1.2 billion profit.
After having reached an all-time high in mid-2017, the solvency ratio, one of the most important indicators Romania’s central bank monitors, fell below 19% to 18.86% in December. The level remains much higher than the required 10%, which shows banks still have enough room to continue funding the economy.
The lenders’ profits in the past few years have also been driven by the improvement in portfolio quality and decline in provisions, after banks got rid of non-performing loans. The NPL ratio dropped to 6.4% at the end of last year.
(English version by Loredana Fratila-Cristescu)