27
the Belgian financial institutions has dropped
strongly since the crisis. The ROE divides the
net profit by the equity of the company. The
result shows the profitability of the company.
During the financial crisis of 2007-2008 the
profitability of the financial sector dropped
considerably. Just before the crisis, ROE lev-
els were sometimes achieved that fluctuated
around 20%.
At present, however, the financial sector is
achieving an ROE of 0.7% (figure from end
2011).
Naturally, this percentage cannot be
maintained either. The sector must therefore
look for the right balance, in which sustain-
able but viable ROE levels have a central place:
a percentage around 8 or 12% would be an vi-
able
new normal
.
>
Stable financial sector
-40
-30
-20
-10
0
10
20
30
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
20.4
13.7 11.8 13.6 15.8 18.5
22.4
13.2
-36.5
-2.6
10.5
0.7
EVOLUTION OF THE PROFITABILITY OF THE FINANCIAL SECTOR
(
SOURCE: NBB)