Commentary by the Czech Bar Association
The annual profitability of banks in the first quarter of 2026 reached 1.12% of the banking sector’s average assets and 17.1% of its Tier 1 capital.
Banks’ annual profitability, as measured by return on assets, remained essentially unchanged compared with the previous quarter (1.12% vs. 1.13%) and is below the 1.16% annual average achieved during the same period a year ago. Over the past five years, i.e., since the first quarter of 2022, profitability has stood at 1.06% of assets. At the same time, profitability, as measured by return on assets, has been below the pre-pandemic average of 1.16% from 2015–2019 (the long-term average for 2008–2019 was 1.24%).
In terms of banks’ profitability relative to Tier 1 capital, the return on Tier 1 capital fell to 17.1% from 18.8% in the previous quarter. The return on equity is below the 18.9% recorded in the same period a year ago. Over the past five years—that is, since the first quarter of 2022—profitability relative to Tier 1 capital has shown a return of 15.7%. Compared with previous trends, profitability relative to Tier 1 capital in the most recent quarter is below the pre-pandemic average of 17.4% (the long-term average for 2008–2019 was 20.5%).
Profitability of the Banking Sector
% of assets and capital
Source of Primary Data
CNB ARADCategory
Banking SectorData Frequency
quarterlyNote
In the case of return on capital, this is the ratio of year-to-date annualized after-tax profit to the average year-to-date Tier capital for the given period and since the end of last year.In the case of return on assets, it is the annual average of quarterly after-tax profit divided by average annual assets.
The data also includes figures for banks and branches of foreign banks providing services in the Czech Republic, as well as figures for branches of banks operating abroad.
