The system’s profitability was affected last year by the purging of non-performing loans, which had to be fully covered with provisions. Cleaner lending portfolios should allow for a considerable drop in net provisions in 2015-2016, lowering lending risk costs.
Risk costs in Romania were among the highest in the region (4% in 2013) and had a difficult year in 2014 as well (4.1%), as banks speed up amortization and provisioning. These costs are expected to drop to 2.8% in 2015 and 2.4% in 2016, according to the Deloitte study ordered by local banking industry association CPBR.
Net revenues by assets are seen dropping from 5% last year to 4.7% this year and 4.6% in 2016, while the expenditure/revenue ratio is seen rising from 57.2% last year to 59.4% this year and 59.9% next year.
The local banking system is expected to register asset growth of 2% this year and 2.3% next year.
Revenues from interests are seen growing 3% this year and 4% in 2016.