Romanian National Bank marks RON 3.8 bln profit in 2024, up 58% YoY
The National Bank of Romania (BNR) ended 2024 with a profit of roughly RON 3.8 billion (EUR 760 million), a 58% increase compared to the previous year, despite the operations it performed to maintain the national currency's stability.
The figures, published in a report on Monday, June 23, show that operating costs for 2024 were about 13% below the budgeted level. Moreover, these costs also decreased to 8% from about 11% in 2023.
Most importantly, however, was the total operational profit of more than RON 5.64 billion, which excludes expenses with unfavorable differences from the revaluation of foreign currency holdings, as well as net income from the revaluation of buildings and land.
“The following developments stand out in particular: an operational profit of RON 5,64 billion (EUR 1,12 billion), 16% above the operational profit of the previous year,” the report states.
The document mentions that revaluation losses concerning foreign currency decreased.
The report also notes that the liquidity surplus in the money market continued to grow in the first part of 2024 but subsequently narrowed more sharply in the fourth quarter, and was further drained by the central bank through the deposit facility. This evolution led to the registration of significant interest expenses.
In addition, income was recorded from government bonds in lei purchased by BNR, mainly in 2020. The bank purchased the bonds to consolidate structural liquidity in the banking system to contribute to the sound financing of the real economy and the public sector.
The bond revenues, however, were lower than the interest expenses paid within monetary policy operations, resulting in a net outcome for monetary policy operations in 2024 amounting to a loss of RON 2.53 billion.
According to the BNR, the loss resulting from these activities “reflects the costs of pursuing the fundamental legal objective of ensuring and maintaining price stability.”
This year, BNR reportedly spent/sold EUR 6 billion of its foreign exchange reserves - about 10% - to prop up the local currency after the victory of far-right presidential candidate George Simion in the first round of elections, which led to the collapse of the government. The currency relatively recovered after the election of centrist Nicusor Dan as president.
(Photo source: LCVA | Dreamstime.com)
