In spite of the financial crisis, local banks were less profitable last year, compared to lenders in Central and Eastern Europe. The ROE amounted to 26 percent in the Czech Republic in the first quarter of 2008, and to 19 percent in Hungary after the first half of last year.
As of last year, BNR has been using a new formula to calculate indicators.
“Higher provisions and financing costs will lead to a decline in bank profitability. The interest margins narrowed. It is very likely that some banks, very aggressive in previous years, are currently at their supportability limit,” Raiffeisen Bank’s Chief Analyst, Ionut Dumitru, told Business Standard.
Both the ROE and the return on assets (ROA) were dropping by the end of the year, compared to the first thee quarters. The fourth quarter was the first to feel the impact of the global crisis. On the other hand, some lenders had outstanding profits from selling participations in insurance companies.
Last year, the 43 banks operating locally made a record €1.27 billion in profit, while assets rose to €79 billion. Banks with foreign capital own 87.9 percent of the total assets of the banking system.
