Romanian banks’ aggregated profit (chart) increased by 5.5% y/y to RON3.9bn (€748mn) in Q2, recovering from a 9.3% y/y decline in Q1, according to data from the National Bank of Romania. The rebound reduced the first-half decline in net profit to 1.9% y/y, with banks earning RON7.3bn (€1.4bn) in H1.

The improvement in Q2 lifted the banking system’s profitability ratios from the weak levels recorded in the first quarter, although they remained below those seen in recent years. Annualised return on assets (ROA) reached 1.5% in H1, up from 1.4% in Q1 but below 1.68% in both 2024 and 2025 and 1.8% in 2023.

Annualised return on equity (ROE) followed a similar pattern, rising to 15.5% in H1 from 14.1% in Q1. It remained below 17.6% in 2025, 18.4% in 2024 and 20.1% in 2023, leaving the banking system’s profitability on a downward trend despite remaining relatively strong.

The banking sector’s assets increased by 9.7% y/y to RON981bn (€187bn) at the end of June. The ratio of banking assets to GDP has historically stood at around 50% and has remained below that benchmark in recent years, pointing to relatively modest financial intermediation in Romania.

Credit quality also deteriorated slightly as economic activity slowed. The non-performing loan (NPL) ratio increased to 2.9% at the end of June from 2.8% three months earlier, reaching the upper end of the 2.5%-2.9% range in which it has remained over the past three years.

The increase in bad loans remains limited despite the weaker economic environment, with the NPL ratio still within the range recorded since 2023. The combination of slower profit growth, subdued financial intermediation and a moderate deterioration in asset quality comes as Romanian banks continue to operate with profitability well above levels seen in many European markets.