The banking sector has a good capacity of dealing with significant adverse macroeconomic shocks, reads the Report on financial stability for 2013, released by the National Bank of Romania (BNR). The stress test conducted by BNR found that the solvency of the banking sector would drop by 4 points, to 10.8 pc in June 2015 if the RON lost over 20 pc of its value and a negative economic growth were experienced in the next years, but only few small banks would need supplementary capital. The report also mentions that the coverage degree of bad loans with IFRS provisions and prudential filters remains comfortable (89.5 pc in August 2013), being among the highest levels compared to the other countries of the region. Such a prudent conduct superimposes to the constraints that still affect the financial results of credit institutions.
According to BNR, the main vulnerabilities of the banking sector, namely the high level of bad loans in the conditions of a negative dynamic of loans extended to the private sector, along with the acceleration of the cross-border financial disintermediation process remain within manageable limits. The report notes that the main challenges for the financial stability in the coming interval are resuming the crediting process in sustainable conditions, against the background of a continuing and even intensifying process of financial disintermediation, as well as the adequate management of the quality of bank assets. In the first eight months, the Romanian banking sector registered a profit of RON 1.5 bln, up 30 pc against June, when it had reported a result of RON 1.15 bln, after cumulated losses of RON 2.3 bln last year, against the background of increas