Romanian banks reported aggregated net profits of RON 4.2 billion (EUR 850 million) in Q3, up from some RON 3.7 billion (EUR 750 million) in each of the previous two quarters, setting a new record for the nominal quarterly earnings according to data published by the National Bank of Romania (BNR).

The buoyant rise in consumer loans and the refinancing of existing loans in their portfolios have visibly improved banks’ bottom line in the third quarter of the year. The stock of loans has eventually gained momentum, and the loan-to-deposit ratio improved slightly to 67% in Q3 from 66% in each of the previous two quarters.

The return on equity (ROE) stayed just above 20% in Q3 – where it has been for each of the first three quarters of the year. This particular metric had been slightly better in the first three quarters of 2023, but meeting the equity requirements eroded this overall profitability indicator.

Return on assets (ROA) has similarly deteriorated somehow to under 1.9% (1.87% in Q3) after around 1.9% in the first three quarters of 2023.

The quality of the banking system’s portfolio, as reflected by the non-performing loans (NPL) ratio, remained good, with the ratio around 2.5% for the past two quarters after a marginally better performance earlier but compared to 2.6% in Q3 2023.

iulian@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)