Profitability of the Banking Sector

1.10 % return on assets
Current value
15.97 % return on equity
Current value

Commentary by the Czech Bar Association

The annual profitability of banks in the second quarter of 2026 reached 1.1% of the banking sector’s average assets, and the seasonally adjusted profitability of banks excluding foreign branches reached 16% of their equity.
Annual bank profitability, as measured by return on assets, fell to 1.1% from 1.12% in the previous quarter and is below the 1.15% annual average achieved in the same period a year ago. Over the past five years—that is, since the second quarter of 2022—profitability has stood at 1.1% 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’ return on equity, the return fell to 16% from 16.1% in the previous quarter. The return on equity is above the 15.9% recorded in the same period a year ago. Over the past five years—that is, since January 2021—return on equity has averaged 14.3%. Compared with previous trends, profitability relative to equity in the last quarter is above the pre-pandemic average of 13.9% (the long-term average from 2008–2019 was 14.9%).

Profitability of the Banking Sector

% of assets and capital

CBA Monitor
You can hide a data set by clicking on the data set name in the chart legend.

Source of Primary Data

CNB ARAD, calculations by the Czech Banking Association.

Category

Banking Sector

Data Frequency

quarterly

Note

In the case of return on capital, this is the ratio of the estimated seasonally adjusted profit of banks without foreign branches (since they are not subject to regulatory capital requirements) to the average amount of equity capital during the given period.
The central bank publishes the banking sector’s return on profits relative to Tier regulatory capital, whose share of total capital has been declining since 2022 (see chart here: https://www.cbamonitor.cz/statistika/role-zisku-bank-v-jejich-kapitalu ).
In the case of return on assets, this is the annual average of the quarterly after-tax profit of the entire banking sector relative to average annual assets.
The ROA figures also include data for banks and branches of foreign banks providing services in the Czech Republic, as well as data for branches of banks operating abroad.

Related Charts

Bank Profits in the Economy
Capital Adequacy and the Role of Profit in It
Net interest income

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Comments

Focus: Bank Profits: A Large Number Deserves a Broader Context
Jaromír Šindel 22. 10. 2026

The growth in banks’ nominal profits must be viewed in the context of the overall economic trend. Compared with the pre-pandemic year of 2019, bank profits in previous years grew more slowly than nominal GDP, household wage income, and government tax revenues. This depends not only on the base year but also on whether we are comparing the current level or the average annual amount of bank profits over the entire period, in which case the gap relative to the rest of the economy is more pronounced. Nevertheless, it is true that the banking sector’s growing profits are not driven by net interest income, but rather by cost efficiency—thanks in part to the solid performance of the Czech economy.

Two bank stress tests, one conclusion: the resilience of Czech banks
Jaromír Šindel 06. 08. 2026

The Czech National Bank has published two stress tests over the past two months, which at first glance yielded differing results. In the macro stress test from the June Financial Stability Report, the sector’s capital ratio fell to 15.8%, while in the August supervisory stress test, it rose to 18.4%. However, this is not a contradiction per se, but rather a consequence of their different purposes and methodologies. Both tests confirm that Czech banks would be able to weather even an exceptionally deep recession. Below, I analyze the four key differences between these tests.