The aggregate net profits of the Romania banking system increased by 3.6% y/y to RON1.95bln (€395mn) in the first quarter of this year, to reach among the highest quarterly aggregate earnings ever, according to calculations based on the data published by the National Bank of Romania (BNR).
The cumulated profits of the three largest banks in Romania — Banca Transilvania, BCR and BRD — exceeded RON1bln in Q1, half of the profit of the entire banking system.
Banca Transilvania, the largest bank by assets on the local market, reported a net profit of RON308mn (down 47% y/y), while the profits of BCR Group and BRD-SocGen — the second and third largest lenders in the country — rose by similar rates of around 12.5% y/y to RON478mn and RON246mn respectively.
The banking system’s annualised return on assets was 1.22% in Q1, compared to 1.33% in Q1, 2021, and 1.36% in the whole of 2021.
The annualised return on equity (ROE, 12.9%) was slightly stronger compared to Q1 2021 (12.2%) but, again, not as high as in the whole of 2021, which was the best year for the Romanian banking system since 2018 in terms of profitability rates (and the best ever in terms of nominal earnings).
The slightly higher earnings occurred amid 11.6% larger assets (RON642bn) of the banking system at the end of March compared to the same time last year.
As regards the quality of the banking system’s portfolio, the non-performing loans (NPL) ratio decreased to 3.3% at the end of March this year — the lowest level since the ratio was calculated for the first time, in Q3 2014.