Romania’s banking system reported a net profit of about RON 6.4 billion (EUR 1.35 bln) in 2019, down 7.2% compared to 2018, while its assets climbed by 9.8% to a new record of RON 495.3 bln (EUR 103.6 bln), according to data from Romania’s National Bank (BNR) consulted by Ziarul Financiar daily.
The gross profit of the banks in 2019 was about RON 7.92 bln (EUR 1.67 bln) and the tax on profits paid by banks summed up to RON 1.53 bln (EUR 322 mln), ZF daily reported. The profits of the banks, still robust, were in line with the rise in lending, the daily reasoned.
At the end of 2019, the stock of loans was 7.6% higher compared to December 2018, which was the highest annual rise since 2009. Romania's economy also grew by 4.1% in 2019.
The return on assets (ROA) and return on equity (ROE) at the end of 2019 were 1.35% and 12.32%, respectively, down from 2018, when values close to those reported for 2007-2008 were recorded. The solvency rate - one of the most important indicators tracked by the BNR, which shows how well capitalized banks are [but also how efficiently they manage to use capital by extending loans] - rose again at the end of 2019 to 20%.
The loans to deposits ratio and the NPL rate decreased in 2019 compared to 2018. While the latter (NPL ratio was 4.1%) reveals healthy stock of loans, the former (loans to deposit ratio dropped to 70%) reveals rather inefficient use of the resources.
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