Romanian banks’ return on capital is 15.5%, almost double the European level, and returns are in line with the risks they manage, Florian Nyagu, deputy director of the National Bank of Romania’s financial stability department, said on Tuesday. (BNR).

“The return on capital is 15.5%, almost double the European level, but if we look at how the banks’ profitability looks compared to the risks they manage, I think the balance sheet is adequate. However, although profitability is higher than last year, we intend to recommend a very balanced dividend distribution policy for certain banks,” said Florian Nyagu at a conference dedicated to the banking and financial industry as part of the “Bucharest Leaders Summit: New Challenges for the Future”.

He noted that Romania’s banking sector has a financial condition commensurate with the risks, and compared to the European average, we are much better. The level of non-performing loans tends to decrease. The way in which Romania’s banking sector covers expected losses is the best in Europe. In this context, Florian Nyagu said that we have reason to believe that the banking sector can continue to finance the real economy, with solvency and liquidity resources, so that the level of financial intermediation can grow steadily.

Also, the BNR official stated that if we compare the profitability of the banking sector with the profitability of the real economy for 10 years, we will notice that the banking sector of Romania has never had a higher profitability than the recorded real economy. In contrast, on average, banks had returns about 10 percentage points below those in the real economy.

Florian Nyagu also noted that over the past 3 years there has been an increase in lending to companies by banks, the growth rates of companies are the highest compared to Europe.

Source: Agerpres