Is the Romanian Banking Industry Worth Investing in? A Romania - UE Comparative Approach

The goal of this research is to establish the effects that the financial crisis had on the Romanian banking system's investors. To this end, after highlighting the trends for the European banking system, we focused on the evolution of profitability indicators for the banking system in Romania. The data analysis covers the period between 2007 and 2016. The first indicator taken under consideration is Return on equity (ROE), which shows the profit generated by a company based on the money invested by shareholders. A second indicator that we analyse is Return on assets (ROA), which shows the banks capability to generate profit from the use of its assets. We will also try to decompose each indicator using the DuPont analysis in order to determine which factor had a larger influence on its evolution. After conducting this study, we concluded that, the Romanian banking sector was affected in terms of attractiveness for investors as a result of the financial crisis.