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Financial Crisis And Bank Profitability – The Case Of Romania

Author

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  • Imola Driga

    (University of Petrosani Faculty of Sciences)

Abstract

The purpose of this paper is to provide a global perspective on the determinants of bank profitability in Romania and to examine the effects of the financial crisis on bank profitability. In 2009, the banking system began to sense the effects of the crisis due to stagnation in lending, increased provisioning requirements and higher funding costs. Banks have tried to mitigate profit decrease by resizing networks expanded aggressively in recent years. Although the financial results of banks were still positive, the total profit recorded was more than 5 times lower than in the previous year. A major concern for banks has been how to manage anticipated and increasingly recorded credit losses on the market. These issues are explored more in depth in this study.

Suggested Citation

  • Imola Driga, 2013. "Financial Crisis And Bank Profitability – The Case Of Romania," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(41), pages 34-45.
    • Handle: RePEc:aio:aucsse:v:1:y:2013:i:41:p:34-45
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    File URL: http://feaa.ucv.ro/AUCSSE/0041v1-006.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    financial crisis; Romanian banking system; bank profitability; return on assets; return on equity;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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