Record Profit for Romanian Banking System in S1/2024

The Romanian banking system reported a record profit of 7.5 billion lei in the first half of 2024, a 10% increase compared to the same period in 2023. This growth was driven by the performance of 26 banks that were in the black, while 6 banks reported cumulative losses of 79.3 million lei.

Profitability of Major Banks in H1/2024

The big banks in Romania were profitable in the first half of 2024, but their results were mixed. Some banks achieved higher profits than in H1/2023, while others reported lower earnings. This mixed performance occurred in a context of continued lending and income growth, albeit at a slower pace due to high interest rates and low risk costs.

Interest Rates and Bank Profitability

Interest collected on loans is the primary source of profit for banks. In the first half of 2024, interest rates on lei-denominated loans remained high, despite inflation falling below 6% and then 5%. The National Bank of Romania (BNR) began reducing interest rates in July, with further adjustments in August. This decrease in interest rates is expected to impact banks’ income from interest collected on loans and profits.

Source: AFP