Page 106 - SE Outlook Regions 2024

5.7.2 Banks
Moldova’s banks have preserved their profitability amid sluggish
lending.
The aggregated profit of the 11 banks operating in Moldova increased by 13.1% y/y to MDL3.23bn (€167mn) and the return on equity (ROE) edged down marginally to 17.5% in January-October 2023 from 18.3% in the same period of 2022.
Lending has lost momentum in Moldova amid high interest rates prompted by the hawkish monetary policy. The stock of bank loans increased by only 3.9% y/y to MDL62.9bn at the end of October.
Total bank assets, however, advanced by 15.5% y/y to MDL126.8bn.
The individual profitability of banks measured by ROE was above average for the large banks, but the most profitable of them was the fourth largest by assets, namely OTP Bank, with a performance of 28.1% ROE after its net profit more than doubled in annual terms.
Moldova Agroindbank and Victoriabank posted the highest advance of assets, over 20% y/y, while Moldinconbank was close (+19.1% y/y) so that the first four largest banks by assets accumulated 81% of the banking system's assets and 87% of the aggregated profit. The other seven banks account altogether for less than the average assets or profit of each of the largest four banks.
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