The Romanian banking sector's profit was RON 13.5 billion at the end of 2023, 34.3 percent higher compared to 2022, amid the upward evolution of the operating profit, as a result of the increase in net interest income and the low level of adjustments for expected credit loss net expenses, shows the 2023 Annual Report released on Thursday by the National Bank of Romania.
According to the cited source, out of a total of 32 credit institutions (including the branches of foreign parent entities), 25 banks (with a cumulative market share of 99.4 percent) recorded a total net positive result in the amount of RON 13.6 billion, while 7 small banks recorded cumulative losses in amount of RON 0.12 billion.
Net interest income represented the main component of operating income (70 percent), followed by net fee income (16 percent), while net exchange rate differences were the third source of operating income (8 percent).
The report also shows that the Romanian banking sector had a favorable period in 2023, despite the challenges arising from the geopolitical context and certain disruptive events (such as the turmoil in the US and Swiss banking sectors), as the banks consolidated their balance position, and aggregate assets increased by 11.7 percent to RON 852.4 billion in December.
Depositor appetite for foreign currency deposits was on a downward trend, as the share of deposits in domestic lei in total private sector deposits was on the rise, to roughly 70 percent in December 2023 (from 66 percent in December 2022).
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