Romanian banks to end 2013 in the profit area – c-bank official

By bne IntelliNews December 6, 2013

Romania’s banking system will remain in the profit area this year after its aggregate profit increased to RON 1.6bn at the end of October from RON 1.5bn in Jan-Sep, the head of the central bank's surveillance department, Nicolae Cinteza, told a banking conference as quoted by news agency Mediafax.

Roughly half of the 41 banks will report profits at the end of the year, while the rest of them will remain in the negative area, he added.

Romania’s banking system reported aggregate losses in 2010-2012 and turned into the profit area in 2013 despite the share of bad loans that keeps rising, and the sluggish creation of new loans.

Banks have probably increased their provisions for bad loans rather sharply in November and will continue to do so in December as they are adjusting their provisioning policies to the IFRS, Cinteza commented, implying that the end-year profitability would visibly decrease.

The stock of provisions under the national methodology increased by more than RON 1bn in September to RON 45.9bn [EUR 10.3bn] at the end of the month to account for 22% of the banks’ total exposure [loans plus deposits]. In October, however, the stock of provisions increased much slower, by only RON 318mn.

Related Articles

Hungarian branch of Bucharest listed Digi to buy Invitel Tavkozlesi in €140mn deal

Bucharest listed Digi Communications announced on July 21 that its Hungarian subsidiary, Digi Tavkozlesi es Szolgaltato, has signed an agreement to acquire Hungarian broadband and telephone provider ... more

Romanian media tycoon Voiculescu to be released on parole

A Romanian court ruled on July 18 that media tycoon and former politician Dan Voiculescu, who was sentenced to 10 years in prison in August 2014, should be released on parole after serving ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more