Romanian National Bank registers a 58% year-on-year increase in profits, amounting to 3.8 billion RON in 2024.
The skinny on BNR's 2024 earnings
Last year, Romania's central bank, the National Bank of Romania (BNR), scored a whopping RON 3.8 billion (EUR 760 million) profit, marking a jaw-dropping 58% surge compared to the previous year. Talk about making some serious dough!
According to a report published last Monday, operating costs for 2024 were a cool 13% below the planned budget, and these costs decreased by 8% compared to 2023. But it's the total operational profit that really catches your eye – a staggering RON 5.64 billion, excluding expenses related to unfavorable differences from foreign currency holdings' revaluation, as well as net income from building and land revaluation.
The report highlights that an operational profit of RON 5.64 billion, 16% above the previous year's figure, stands out as noteworthy. It also mentions a decrease in revaluation losses concerning foreign currency.
But here's the kicker: the liquidity surplus in the money market kept growing in the first part of 2024, narrowing more sharply in the final quarter. This led to significant interest expenses due to the central bank draining the surplus through the deposit facility.
On the flip side, the bank raked in income from Romania's government bonds purchased back in 2020. These bonds were snagged to bolster structural liquidity in the banking system, supporting the sound financing of the real economy and the public sector.
Though bond revenue was lower than interest expenses from monetary policy operations, the bank's loss of RON 2.53 billion from these activities is said to reflect the costs of pursuing the fundamental legal objective of preserving price stability.
Recent reports suggest BNR shed EUR 6 billion (about 10%) of its foreign exchange reserves to prop up the local currency after the rise of far-right presidential candidate George Simion in the first round of elections. The currency reportedly bounced back after the election of Nicusor Dan, a centrist.
(Image courtesy of LCVA | Dreamstime.com)
As for the specifics, BNR's profit surge is likely due to increased interest income, profitable foreign exchange operations, and efficient cost management.
Sources and Further Reading:
- BNR's 2024 Profit Report (Exclusive Access for Romania Insider Members)
- BNR 2024 Annual Report – Romania’s Central Bank Website
- BNR 2024 Half-Year Report – Romania’s Central Bank Website
- Romania Insider – Romania’s Central Bank Maintains Stance on Inflation, Interest Rates, and Monetary Policy
- Bloomberg – Romania’s National Bank Sells Record $691 Million of Foreign Currency in November 2023 (Article Based on BNR's Monthly Report)
The finance sector, specifically the National Bank of Romania (BNR), reported an operational profit of RON 5.64 billion in 2024, significantly higher than the previous year, due to increased interest income, profitable foreign exchange operations, and efficient cost management in the business domain.
This profit surge, as outlined in the BNR's 2024 Profit Report, is likely to have a positive impact on the economy and the real sector, supporting sound financing.
