Romanian banks generate 16.6% ROE in 2022

Romanian banks generated just over RON 10 bln (EUR 2 bln) aggregated net profit in 2022, 25% more compared to 2021, which accounted for 16.6% of their average equity during the year.

The return on equity (ROE), 13.3% at the end of 2021, thus reached the highest level since 2008 (17%) – when the Romanians were borrowing heavily along the real estate bubble that later pushed up the NPL rate above 20%.

This time, banks say that their portfolios are cleaner than ever: with an NPL ratio of 2.7% at the end of December 2022, down from 3.4% at the end of 2021.

Indeed, the lending pace is far from what it was in 2008, as the stock of non-government loans increased by only 12% YoY as of December – compared to 16.4% YoY consumer price inflation and a much faster rise in factory-gate prices.

(Photo source: Inquam Photos/Octav Ganea)