KPMG: Romanian banks record lower profits while European ones on the up

The first 25 banks in Romania by assets made a total IFRS profit of EUR 517 million last year, down 27 percent from 2009, in constant foreign exchange terms, according to a recent report issued by KPMG. Only 15 of the 25 banks considered in the report recorded profits in 2010. 11 banks were profitable in both years but only four of them had increases in profits as compared to 2009, according to KPMG. The 25 banks had EUR 71 billion in assets at the end of 2010. While 2008 was a good year in the recent history of Romanian banking (in marked contrast to the Western Europe but also influenced by some profitable divestments made by banks) in 2009 and 2010, the profits of Romanian banks fell substantially. The reason is that the recession hit Romania (and CEE) later than Western Europe, really only beginning to bite in 2009,” said Cezar Furtuna, Financial Services Partner with KPMG in Romania. “Some banks’ half year results are available but probably only the full year 2011 results will show whether Romanian banks have started to reverse the recent trend in performance. For sure the turnaround will very much depend on the speed of Romania’s economic recovery and on the development of the sovereign debt crisis,” he went on. In Europe, the leading 15 banks made collective profits of EUR 85 billion last year, double the amounts in 2009 and up compared to the losses of EUR 25 billion in 2008. More about the report here. editor@romania-insider.com