Romania’s banking system posts 15% yoy stronger profits in Q1

Romania’s banking system boasted RON 1.9 bln (EUR 383 mln) in the first quarter of the year, which was 17.3% (+15% in euros) more compared to the same period of 2020, according to calculations based on data released by the National Bank of Romania (BNR).

Return on assets (ROA) was 1.33%, compared to 0.95% in the whole 2020 and 1.27% in Q1 last year.

The return on equity (ROE) also improved from last year, to 12.2% from 8.7% in full 2020 and 11.7% in Q1 last year.

The banking system’s assets have increased significantly by 11% yoy to RON 575 bln (EUR 117 bln) driven by deposits, while lending edged up more modestly.

At the end of March, the stock of deposits was up 14.7% yoy (to RON 431 bln), while the stock of deposits had advanced by only 6.6% yoy to RON 291 bln. Thus, the loan to deposit ratio further shrank to 66% at the end of March from 71% one year earlier.

On the upside, the capital adequacy strengthened to the unprecedented value of 24.6% - up from 20.4% one year earlier, witnessing excessive resources in the banks’ balance sheets.

Regarding the quality of the bank’s portfolio, the non-performing loans ratio calculated under EBA methodology picked up slightly to 3.9% at the end of March from 3.8% at the end of last year, but it is still at the same level as in March 2020.

(Photo source: Inquam Photos/Octav Ganea)