After losing ground in the first part of the year, the shares of Banca Transilvania (BVB: TLV) and BRD-Groupe Societe Generale (BVB: BRD), the two credit institutions in the basket of the blue-chip index BET, demonstrated strong growth over the last month amid a generally positive context on the Bucharest Stock Exchange (BVB), Bursa daily comments quoting stock exchange brokers and economists.

The reason behind such expectations is the wider interest rate spread, which already pushed up banks' profits to a new record in Q1 this year.

The shares of Banca Transilvania increased by 19%, that of BRD by 11%, while the main basket of shares of the capital market advanced by only 10%, according to calculations for June 26-July 26.

Valentin Lazea, the chief economist of the National Bank of Romania (BNR), pointed out that last year the banking system in Romania had a record profit of RON 10.2bn, which will be far exceeded this year.

"Among the reasons behind this increase is the fact that, in the first four months of this year, commercial banks increased the margin between interest rates on loans and interest rates offered on deposits. While the BNR increased the monetary policy rate by 25bp, commercial banks increased the interest rate on new loans contracted in lei by 41bp but decreased the interest rate offered on new deposits in local currency by 53bp. The wider margin results in more profit," explained the BNR chief economist at the end of June at a conference organized by Bursa.

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iulian@romania-insider.com