Kearney: Romanian banks haven’t suffered much from COVID-19

The operational efficiency of the Romanian banks did not deteriorate significantly as an effect of the recent economic crisis, according to a study carried by global management consulting firm Kearney.

However, the country’s banking system is starting to feel the competition from fintech and neobanks operating in an optimized environment and don’t face the pressures faced by the traditional banks, the study reads, according to Ziarul Financiar.

The study covers 89 retail banks in 22 countries, of which 51 banks in Western Europe and 38 banks in Eastern Europe, including Romania.

One in ten European banks reported losses in 2020, and the average profit per customer decreased by 30%. Meanwhile, in Romania, the average profit per customer decreased by only 16%, data compiled by the consultancy firm reveals.

The operational efficiency of Romanian banks did not deteriorate significantly, as the cost to income ratio remains around 60% despite increasing by 0.3 pp compared to 2019. The 3.9% decrease in operating costs partly offset the 4.5% drop in revenues.

According to the study by Kearney, the performance of retail banks (globally) will return to pre-pandemic levels within three to five years, although profitability will remain under pressure for the next two years.

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