The aggregated profit of Romanian banks decreased by 9% in the first quarter of this year (Q1) compared to the same period last year, to RON 1.61 billion (EUR 334 million), according to calculations based on the profitability ratios published by Romania's National Bank (BNR) on May 31.
The return on assets (ROA) dropped to under 1.3% in Q1 from 1.6% in the same period last year.
The return on equity (ROE) also went down from 14.5% to 11.7%.
The coronavirus pandemic drove down the local banks' profits as several lenders set aside provisions to mitigate the higher risks generated by the COVID-19 crisis.
The banking system's aggregate assets at the end of March were 14.7% higher year-on-year, and at RON 518 billion (EUR 107 bln), The quality of assets also improved.
The non-performing loan ratio (NPL) calculated under EBA methodology further declined to 3.9% in March 2020 from 4.9% one year earlier.
The solvency ratio increased slightly to 20.3% at the end of March from 20% one year earlier, remaining roughly twice as robust as the statutory minimum requirements.
Fitch Ratings has taken rating actions on five Romanian banks in light of the coronavirus outbreak in Europe.