bne IntelliNews – Moldovan banks close to pre-crisis profitability

The aggregate profit of Moldovan banks increased by 54% year-on-year to MDL 2.30 billion (€115 million) in 2021, according to data released by the National Bank of Moldova (NBM).
This is a stronger performance in nominal terms compared to 2019, when aggregate profit reached MDL 2.26 billion. But more detailed comparisons show that bank profitability still lags behind the record year of 2019.
On the upside, aggregate assets and in particular the stock of loans increased significantly in 2021, revealing robust consolidation in financial intermediation. The extensive reforms carried out several years ago, followed by the improvement of the quality and transparency of the ownership structure of banks, are now bearing fruit.
Thus, return on equity (ROE) fell from 8.89% in 2020 to 12.35% in 2021, still lagging 14.63% in 2019. Similarly, return on assets (ROA) was of 2.01% last year, a significant improvement from 1.53% in 2020, but visibly below the record of 2.47% set in 2019.
The banking system’s asset-to-GDP ratio remained constant at just over 50% at the end of 2021, well above the level of 43% reached in 2018-2019. In nominal terms, total bank assets reached MDL 118.5 billion at the end of 2021, up 14.2% year-on-year.
The volume of loans on banks’ balance sheets increased by 21.7% year-on-year to reach MDL 54.6 billion at the end of 2021, or 23.3% of GDP, against 21.8% a year earlier and 19, 5% at the end of 2019.