The aggregated net profit of the Romanian banking system was nearly €300mn in Q3, according to bne IntelliNews calculations based on central bank data. Non performing loans (NPLs) under the EBA definition dropped by 2pp y/y to 8% at the end of September.
Romania's banking system has posted robust profits over the past three years and a double-digit Return on Equity (ROE) ratio over the period. It incurred losses during the recession years 2010-2014 as the quality of the loan portfolio was deteriorating, prompting provisioning costs. Since mid-2014, under pressure from the central bank, lenders have gradually settled their bad loan issues and the NPL ratio has dropped.
Q3 net profit was in line with the average of the previous two quarters, summing up to a total of €890mn in January-September, 8.5% up y/y. The three largest banks, Banca Comerciala Romana (BCR), Banca Transilvania (BT) and BRD-Socgen, contributed €510mn to the aggregated net profit in the first three quarters of the year. BRD was the most lucrative, with €220mn net profit in the period. BT reported €170mn net profit, while the largest lender BCR (at a very thin margin above BT) reported €120mn net profit.
The total assets of the country’s banking system have increased constantly over the past three years (to €88.4bn at the end of September) at an average rate of 5% p.a. if measured in local currency or 3.5% p.a. when measured in euros. The stock of loans in banks’ portfolios (gross terms) increased at a much slower rate of 3.0% p.a. if measured in local currency and 1.6% p.a. when measured in euros, to €50.6bn (non-government loans) at the end of September.
Consequently, the capital adequacy ratio increased from 17.1% three years earlier to a very robust level of 19.0% at the end of September 2017.
|Assets quality, Risk and Profit for Banking System (eop by default)|
|4Q 08||4Q 09||4Q 10||4Q 11||4Q 12||4Q 13||4Q 14||4Q 15||4Q 16||1Q 17||2Q 17||3Q 17|
|Assets (RON bn, eop)||314.4||330.2||341.9||353.9||365.6||362.3||364.1||377.2||393.6||393.7||398.6||406.4|
|Assets (EUR bn, eop, calculated)||78.9||78.1||79.8||81.9||82.6||80.8||81.2||83.4||87||86.5||87.5||88.4|
|Assets (RON bn, avg. ytd, estimat.)||282.7||326.5||328.1||339.9||366.8||357.2||354.9||363.6||378.5||393.7||394.9||397.5|
|ROA (annualised net profits per ytd avg. assets)||1.6%||0.3%||-0.2%||-0.2%||-0.6%||0.0%||-1.3%||1.2%||1.1%||1.3%||1.4%||1.4%|
|ROE (annualised net profit per ytd avg. equity)||17.0%||2.9%||-1.7%||-2.6%||-5.9%||0.1%||-12.5%||11.8%||10.4%||12.0%||12.9%||12.9%|
|Non-performing Loans Ratio||n.a.||n.a.||n.a.||n.a.||n.a.||n.a.||13.9%||n.a.||n.a.||n.a.||n.a.||n.a.|
|Non-performing Loans Ratio (EBA)||n.a.||20.7%||13.5%||9.6%||9.4%||8.3%||8.0%|
|Impaired claims / Total loan portfolio||9.2%||12.0%||11.6%||9.4%||7.0%||4.9%||4.6%||3.8%||3.6%|
|Impaired claims / Total assets||5.5%||7.1%||6.5%||5.1%||3.9%||2.7%||2.6%||2.2%||2.0%|
|Impaired claims / Total liabilities||6.2%||7.9%||7.3%||5.7%||4.3%||3.0%||2.9%||2.4%||2.3%|
|Net Profit (ytd, RON mn)||4,411||816||-519||-782||-2,347||36||-4,684||4,509||4,087||1,240||2,686||4,054|
|Net Profit (quarterly, RON mn)||760||130||-55||2||-2,238||-1,437||-3,092||2,255||421||1,240||1,445||1,369|
|Net Profit (annuall, EUR mn)||1,175||194||-114||-177||-530||11||-1,053||1,008||911|
|Net Profit (quarterly, EUR mn)||191||31||-13||0||-505||-320||-690||498||93||272||317||298|
|RON to EUR1 [eop]||3.985||4.228||4.285||4.32||4.429||4.485||4.482||4.525||4.525||4.551||4.554||4.599|
|Source: BNR, IntelliNews|
| Calculated as [Average Assets]x[annualised ROA, adjusted to reflect ytd period]|
| Calculated as the differential of net profit|
| Converted quarterly at the eop exchange rate|