Major banks managed to improve their net interest income in the first nine months of this year despite the tight competition on the segment of deposits.
BCR and BRD, the biggest two domestic banks, in the first nine months of the year posted 20% higher net interest income in RON compared with the similar period of last year. In the case of Banca Transilvania, another top player, the income climbed by 17%.
Thus, despite the fight for deposits, keeping paid interest rates at high levels, and the signals regarding loans becoming cheaper, banks have managed to add to their incomes over the year.
Mugur Isarescu, NBR governor, himself harshly criticised bankers for keeping interest rates for RON at too high levels in November, showing interest rates should not exceed by more than 3 percentage points NBR's benchmark interest rate. This would mean interest rates should stand at 11% per year at the highest, but they currently start from 13% per year and can even top 20% for consumer loans, which are viewed as riskier.
On the other hand, bankers say loan default risks have gone up amid the economic downturn and risk costs must be reflected in prices.
The NBR itself is closely watching how much operating profit banks can generate, considering they also need to cover the significant provision expenses now. Should a bank not have enough operating income to cover provision expenses and make a net profit, as well, it needs to boost its capital to maintain its solvency.
Among large banks, Raiffeisen is the exception, having posted a drop of around 18% in net interest income.
Except Bancpost, all top ten banks reported profit (at least in line with IFRS, which have a milder treatment regarding provisions than domestic accounting standards). However, net profits are visibly smaller than in the same period of 2008.
According to NBR d
