Profits for most banks in Romania have increased by individual percentages ranging from 14 to 50%. The entire banking system ended 2023 with a record profit of nearly 14 billion lei, 35% higher than in 2022.
The large banks reported, in general, higher profits for 2023 compared to 2022 levels, amid an acceleration in lending, with earnings growth mainly influenced by high interest rates, as well as low risk costs and reduced provisions, notes Ziarul Financiar.
Interest received by banks on loans represents the main source of earnings for credit institutions, and last year interest rates in lei remained at high levels, although inflation decreased to 14.5% in March, 10.3% in June, and 6.6% in December 2023.
Profits for most banks in the top 15 increased last year by individual percentages ranging from 14 to 50%, but there were also two banks with more significant increases in earnings, as well as two banks that had lower profits in 2023 compared to 2022.
In the context of high interest rates, the profit of the entire Romanian banking system consisting of 32 banks jumped in 2023 to a new record, of nearly 14 billion lei, 35% higher than in 2022, according to data provided by the National Bank of Romania.
Most Profitable Banks in 2023
The three most profitable large banks in 2023 were Banca Transilvania, BCR, and Raiffeisen Bank, with combined earnings of around 6.7 billion lei, approximately 50% of the total earnings of the banking system. And if we add BRD and ING Bank and combine the earnings of the five most profitable large banks in Romania, we reach 9.9 billion lei, over 70% of the total earnings of the Romanian system.
By comparison, in 2022 Banca Transilvania, BCR, and BRD were on the podium in the ranking of the most profitable banks, with combined earnings of 5.3 billion lei.
Top 3 Banks with the Highest Profits
Leading the ranking of the most profitable large banks in 2023 is Banca Transilvania, which also leads the banks on the local market by assets, reporting a net profit of over 2.49 billion lei, an increase of 14% compared to 2022.
At group level, the profit growth last year was nearly 20%, reaching around 3 billion lei.
In second place in the ranking of profitable banks in 2023 was BCR, the second largest bank by assets, which achieved a net profit of nearly 2.49 billion lei, an increase of 36%. At the overall BCR group level, the net profit was over 2.3 billion lei, a 33% increase compared to 2022, due to improved operational performance, supported by increased business volume with clients.
The podium of the most profitable large banks in 2023 is completed by Raiffeisen Bank, the sixth largest bank by assets, which moved up in the profitability ranking after achieving a net profit of over 1.7 billion lei last year, a 39% increase from the earnings in 2022. The bank reported revenues of 3.7 billion lei for last year, 16% higher than the collections in 2022.