ANALYSIS OF THE ROMANIAN BANKS‘ PERFORMANCE THROUGH ROA, ROE AND NON-PERFORMING LOANS MODELS

General assumption of this study is that the banks performance represents their abilityto generate sustainable profitability and that banks‘ profitability is one important issue ofcontemporary banking field, grace to its role in emphasizing of the financial soundness of banks,abreast to others indicators regarding to the capital adequacy or assets quality. The paperexamines how is affected banking profitability (expressed through traditional measures ofperformance ROA - Return on Assets and ROE - Return on Equity) by the CRR Credit risk ratio inRomanian banking system during March 2008 - June 2013. We developed two regression models inorder to study the dependence between mentioned variables. We found that ROA and ROE varyeach of them depending on the CRR Credit risk ratio, which is expressed as the ratio of gross valueof exposure to loans and related interest under ‘doubtful‘ and ‘loss‘ to total classified loans andrelated interest pertaining to non-bank loans, off-balance sheet items excluded.