Profitability of RO banks improves in Q3 compared to H1

The profitability of Romanian banks expressed as return on assets (ROA) and return on equity (ROE) improved in the third quarter of this year (Q3) compared to the first half (H1).

However, for the whole January - September period, the two indicators are lower than the record levels posted in 2018 when the system boasted the best financial ratios since 2008, Profit.ro reported.

Annualised ROA for Jan-Sep rose to over 1.4% from 1.2% in H1, according to a presentation by the head of stability department in Romania’s National Bank (BNR) Eugen Radulescu.

ROA was, however, 1.6% in 2018, close to the value reached in 2008 before the credit crunch hit the local banking system. ROE in the same Jan-Sep period improved to over 13% from 11.3% in H1, but remains below the 14.5% level reached in 2018.

The performance in Q3 alone can not be established from the data presented by the central bank official, but in principle it might have actually improved (in annualised terms) from last year.

The relatively weaker performance of the banking system in H1 (actually in Q2) was caused to a large extent by the provisions the second largest bank, Banca Comerciala Romana (BCR), had to build for the fines related to its savings-mortgage branch BCR BpL.

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