Romania’s bank assets rose 10 pct y/y in March, profit rate surged 31 pct

The total bank assets in Romania increased by 9.7 percent year-on-year in March, up to RON 431.7 billion (EUR 92.7 billion), and return on assets (ROA) index jumped by 31 percent, to 1.65, National Bank of Romania (BNR) show.

Total bank assets in Romania rose from RON 393.7 billion in March 2017 to RON 427.8 billion in December 2017 and RON 431.7 billion in March 2018, when they represented 46.7 percent of the estimated GDP in 2018.

ROA rose from 1.26 in March 2017 to 1.65 in March 2018, reflecting larger profits of the banks. The ROA index is calculated as annualized net profit for the period divided by the average of total assets.

The improved results of Romanian banks are due to a sharp decline of non-performing loans (NPL) ratio, from 9.4 percent in March 2017 to 6.2 percent in March 2018, according to central bank’s data.

But banks still struggle to find clients for their loans, as loan-to-deposit ratio key index continued to decrease – from 80.4 percent in March 2017 to 75.3 percent in March this year.