Romanian banks confirm robust profitability in Q1 despite sluggish credit expansion
<p>Romanian banks’ aggregated net profit increased by nearly 11% y/y to RON 3.7 billion (EUR 748 million) in Q1, marking a new record, according to data published by the National Bank of Romania (BNR).</p>

<p>The aggregated banks’ assets increased by 15% y/y to RON 823 billion (EUR 166 billion) at the end of March – three times faster than the stock of non-government loans – in the quarter.&nbsp;</p>

<p>The equity increased by 20% to RON 75.2 billion (EUR 15.1 billion) at the end of March, boosted by capital consolidation and accumulation of profits.&nbsp;</p>

<p>The larger denominators resulted in slightly lower profitability ratios in Q1 this year compared to the same period last year: 1.8% return on assets (ROA, 1.9% in Q1, 2023) and 19.8% return on assets (ROA, 21.3% in Q1, 2023).</p>

<p>On the upside, capital adequacy increased to 22.9% in Q1 this year from 21.6% in the same period last year.&nbsp;</p>

<p>The loan-to-asset ratio (66%), which reflects how much of their resources the banking system is using to extend loans, dropped to the weakest level since the COVID-19 crisis froze lending in a first stage before the Government intervened with targeted guarantees.&nbsp;</p>

<p>The non-performing loan (NPL) ratio dropped to 2.4% at the end of March 2024, down from 2.7% one year earlier.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Inquam Photos/Octav Ganea)</em></p>