Romania’s Banking Sector Defies Expectations with Strong 2024 Performance

Clarion Global
Sep 19
2 min read

A resilient banking sector reflects the country’s robust economic fundamentals and prudent financial management.

Introduction: From Misperception to Proven Financial Strength

In the modern economy, a solid financial sector plays a pivotal role by channeling funds from savers to investors, fueling innovation and growth. Europe’s economies, including Romania’s, rely heavily on banks as their primary financial intermediaries.

Yet Romania has often been underestimated – sometimes unfairly seen as a peripheral or emerging market – despite being an EU member with a rapidly developing economy. Recent data, however, tell a different story.

Romania’s banking system is not only stable but thriving, showcasing strong profitability, high capital buffers, and low risk levels that rival those of more developed markets.

This transformation is reshaping perceptions and presenting compelling opportunities for global investors, including sovereign wealth funds, private equity, and financial institutions.

Record Profits and Steady Growth in 2024

Combined net profit: RON 14.2 billion (~€2.86 billion), up 5% YoY.
25 of 32 banks profitable; losses limited to RON 413 million (~€83 million).
Operating profit up 6.6%, fueled by interest income (71% of operating revenue).
Fee income stable at 15.3%.

Despite rising administrative costs (+21%), profitability remained strong, with banks also prudently increasing provisions for future risks.

Slight Dip in Profitability Ratios, Still World-Class

ROA: 1.7% (down 0.1pp from 2023).
ROE: 18.4% (down 1.7pp).

Both declines reflect asset and capital expansion, not weakness. Romanian banks expanded assets by 12% and capital by 14.6% in 2024 – strengthening long-term resilience while still delivering above-average returns.

Asset Quality: Among the Safest in Europe

NPL ratio: 2.5%, stable and low.
Provision coverage: 66% (vs. EU average of 41%).
Restructured loans: 1.4%, now low risk under EBA standards.

Romanian banks are outperforming many EU peers in credit quality and provisioning, signaling a conservative and robust system.

Capital & Liquidity Buffers: Well Above EU Standards

Own funds: RON 79.1 billion (+13.5% YoY).
Liquidity Coverage Ratio (LCR): 254.7% (vs. EU average 163%, minimum
requirement 100%).

These figures position Romania as a low-risk, high-resilience banking market with capacity to expand lending and returns without systemic fragility.

Why Investors Should Pay Attention

Romania offers a rare combination: emerging market growth with developed market stability.

EU-regulated banking framework.
High returns compared to Western Europe.
Increasing regional importance, supported by strong macroeconomic fundamentals.

For sovereign funds, private equity, and institutional investors, this is a prime opportunity: a market with scale, consistent growth, and resilient infrastructure ready to support economic expansion.

Conclusion: A Market of Stability and Opportunity

Romania’s banking system has emerged as a beacon of financial stability in Eastern Europe. For global investors, it represents a hidden gem – combining profitability, resilience, and EU-level oversight.

At Clarion Global, we help international investors navigate opportunities like these.

Romania’s banking sector is open for investment – and the numbers speak for themselves.