The overall risk rate in the banking system increased by more than five percentage points, from 47.62% in 2005 to 52.8% in December 2006, amid the banking networks' greater exposure to customers, according to calculations made by the NBR.
The credit risk rate, calculated as a ratio of the unadjusted exposure, related to loans and interest rates included in the "doubtful" and "loss" categories, and the overall loans and interest rates, climbed from 2.6% to 2.8%.
On the other hand, last year the weight of overdue and doubtful loans in the total loans, registered only a slight decrease, from 0.3% to 0.2%. However, the opposite occurred regarding banks' equity capital, with figures increasing from 1.4% to 1.6%.
The most visible change in banking prudence indicators was registered in terms of solvency rate, which fell 3.8% in 2006 to a figure of 17.3%.
In the case of the BCR, last year the solvency rate declined from 15.04% to 11.06%. From January 1, 2007, the minimum threshold accepted by the NBR was set at 8%, compared to the 12% last year.
Last year, banks experienced a lesser degree of liquidity, with the ratio between effective liquidity and necessary liquidity falling from 2.6% to 2.3%.
The NBR reported some noticeable changes regarding profitability within the banking system, both in terms of the returns on assets and returns on equity.
Net income advanced at a slower rate than overall assets, resulting in the average ROA dropping from 1.6% in 2005 to 1.3% in 2006. In 2006, large banks such as Raiffeisen and Alpha Bank witnessed only small increases in net incomes amid the faster expansion rate of assets.
The reduction in returns on equity was even more visible, with net incomes also increasing at a slower rate than owned capitals within the banking sector. The ROE shrank by two percentage points, from 12.7% to 10.7%.
The IMF has recently noted the fact that the ROA and ROE are still solid in the domestic banking system and the weight of non-performing loans is considered "moderate".
Still, the Fund experts believe that with such a fast-paced lending growth, the indirect exposures are much harder to assess in the banks' individual portfolios. As a result, the IMF supports the NBR's plan to upgrade the financial sector assessment programme originally drawn up in 2003.
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