Romania’s central bank revised the aggregated 2012 ROA for the banking system to minus 0.64% from previous 0.58%, data published by the monetary authority indicated. Based on this revision, we also adjusted the estimate for the 2012 net aggregated loss of the banking system to RON 2.35bn [EUR 530mn at eop exchange rate] from an earlier estimated RON 2.13bn [EUR 455mn].

The system’s loss in Q4 alone was RON 2.24bn [EUR 505mn]. The central bank does not disclose directly the aggregated profit/loss of the banking system, but leaked data confirmed our estimates* with a margin of a couple of percentage points.

ROA for the banking system, however, returned in the positive territory to plus 0.55% in Q1 – in annualised terms, the central bank also announced. Based on this, we have estimated an aggregated profit of RON 505mn [EUR 114mn] in the quarter. Earlier in May, leaked reports from the central bank indicated a RON 520mn [EUR 118mn] aggregated profit for Jan-Mar.

The capital adequacy of the banking system increased to 15% at the end of March this year from 14.6% at the end of 2012, the central bank said. The ratio stands well above the 10% level recommended by the central bank. Excessive solvency ratios tend to indicate inefficient use of resources and this is consistent with the local banks avoiding extending loans.

Largest lender BCR-Erste Group reported a 13% solvency ratio at the end of March 2013. The second largest bank, BRD-Societe Generale, reported a 14.6% ratio at end-Feb [as a proxy for end-Q1] and the ratio of the third largest lender - Banca Transilvania, was 12.2% at end-March.

* The main source of error in our estimates is the approximation of average assets with the average of assets at the beginning and at the end of the quarter.