Commentary by the ČBA
The annual profitability of banks in the second quarter of 2026 reached 1.12% of the banking sector’s average assets and 20.3% of its Tier 1 capital.
The annual profitability of banks, as measured by return on assets, remained essentially unchanged compared to the previous quarter (1.12% vs. 1.12%) and is below the 1.15% annual average achieved in the same period a year ago. Over the past five years, i.e., since the second quarter of 2022, profitability has stood at 1.09% of assets. At the same time, profitability as measured by return on assets in the last quarter is 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 rose to 20.3% from 17.1% in the previous quarter. The return on equity is above the 19% recorded in the same period a year ago. Over the past five years—that is, since the second quarter of 2022—profitability relative to Tier 1 capital has shown a return of 18.9%. Compared with previous trends, profitability relative to Tier 1 capital in the most recent quarter is above 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.Return on assets is calculated as 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.
