Czech Republic - "The Banking Sector in Central Europe - Performance Overview"
The analysis of the banking sectors in Czech Republic
- Outstanding efficiency coupled with a cautious approach to risk assessment has resulted in strong profitability in recent years. ROA and ROE ratios in 2011 amounted to 1.19% and 14.7% respectively – levels that many countries in the region would aspire to.
- Operational efficiency is the strongest aspect of banks operating in the Czech market. Cost-to-income for the sector stood at excellent 45.0% in 2011, among the best recorded in the CE region.
- The loan-to-deposit ratio in the Czech Republic ratio stood at 96.4% in 2011, having oscillated around 92% over the last 10 years. The way in which this ratio has evolved shows how lending activity is closely matched to the expansion of the deposit base.
- Asset quality has remained relatively firm in recent years, with only limited deterioration. The ratio of loans overdue by more than 90 days to the total loanbook value has stabilised, totaling 7.1% in 2011.