Page 106 - SE Outlook Regions 2022

3.9.2 Banks

Romanian banks came out of the crisis in better shape than they
entered it.

The Romanian banking system posted RON6.4bn (€1.3bn) aggregated
net profit in January-September 2021, 37% more than in the same
period of 2020 and 24% more compared to the same period of 2019,
according to data released by the BNR.

Banks’ non-performing loan (NPL) ratios were also decreasing.

The ongoing rise in interest rates bodes well for the banks’ profits, but
not necessarily for the quality of their portfolio loans (or for their debtors’
balances).

The banking system’s NPL ratio dropped to 3.7% at the end of
September 2021 from 4.1% one year earlier and 4.4% in mid-2020
during the climax of the crisis.

The net assets of the banking system rose by 13% y/y to RON603bn at
the end of September 2021, roughly in line with the rise in the
non-government loans portfolio (RON315bn, +13.4% y/y). The volume
of government loans surged by 21% y/y to RON163bn at the end of
September 2021.

Some sectors of Romania’s economy may have faced problems during
the COVID-19 crisis, such as hotels, restaurants and cafes (HoReCa)
or more recently the automobile industry, and the economy as a whole
has lost steam after recovering from the lockdown quarter — but this
has nothing to do with the banking system that is now faring better than
ever.

3.9.3 Industry

After a full post-COVID recovery, Romania’s industry returned to the
downward trend that prevailed before the crisis.

106 SE Outlook 2022 www.intellinews.com