Romanian banks could see a decrease of about 58 billion lei in net revenues after the cost of risk, until 2025, compared to the revenues expected before the pandemic, due to risk costs and lower volumes, reveal the data of the latest McKinsey & Company analysis, sent to AGERPRES on Wednesday.
Banks could face two stages of challenges in the coming months and years, according to the McKinsey Global Banking Annual Report, published in December 2020. As a first step, losses on non-performing loans are expected to peak in the short term - until the end of 2021. Subsequently, amid a slow economic recovery, Romanian banks could face significant operational challenges in the medium term due to increased pressure on revenues and margins.
The most likely long-term situation is slow growth, the study said.
Net bank revenues by risk cost may fall by up to a third in 2021 compared to 2019. Banks could remain with a return on capital below 10% in the coming years, compared to an average of 12.6% between 2016 and 2019.
Demand for both consumer and corporate loans may remain low for a while, according to McKinsey & Company experts.
"The current crisis has created major challenges in the way banks operate in Romania, challenges in which banks must learn and adapt accordingly. There are at least two key areas that banks need to prioritize in the next period: firstly, strengthening risk management processes and skills and ensuring a solid basis for their further development. Thus, banks can limit the negative impact of the pandemic and at the same time prepare to return to growth through an appropriate product-channel combination, in line with the changing needs and preferences of customers," says Alexandru Filip, McKinsey & Company Romania Coordinating Par
tner.
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