The Banking Market Overview represents an analysis of the trends and factors that influenced the banking market in 2011 and 2012 compared to the previous years, but also an outlook for 2013 and beyond.
Similar to both 2009 and 2010, the total CEE banking assets had a general positive trend in 2011 and increased in value. Romania maintained its 4th position in the banking market of CEE, however, rising above the CEE average for the first time in the last 3 years.
For the second year in a row, the trend was mainly driven by Poland, with other countries having a rather low increase in terms of banking assets.
The average CEE loans-to-deposits ratio has stopped its high rising trend, decreasing for a limited number of countries while for most of them it is still over 1.
Also, as cards usage is concerned, Romania, Bulgaria and Slovenia have the lowest values of card transactions per inhabitant among CEE countries that are part of EU.
In Romania, the moderation of the banking activities continuedin 2012 as well, as reflected by the evolution on total net banking assets. Also, the total banking loans continued a slight positive trend in 2012. The value of the total banking deposits attracted by the Romanian banking system in 2012 continued to increase – even though at a slower rate showing the population’s continuous tendency towards savings.
The loans to the public sector maintained a high value among the total loans granted in Romania, almost double the value registered pre crisis.
Contrary to the trend registered in the previous year, both the overall number of valid cards and the value of payment transactions decreased in 2012. Moreover, non-performing loans continued their ascending trend in 2012, leading to a further worsening of credit quality for many banks.
In the first quarter of 2012, the overall banking system’s profitability was positive, although only 25 of the 41 banks present in Romania have been profitable. In June 2012, there were relatively small changes among the Top 10 players on the market, based on total net assets: BCR and BRD remain the biggest market players based on their market share, with slight decreases for both of them as compared to their market share from 2011. CEC Bank rejoined the top three banks in Romania, surpassing Banca Transilvania.
As for trends on the Romanian banking sector, we will probably see an increase of corporate loans, accompanied by increased focus on EU funds co-financing and maintaining an overall high quality of customers. Also, due tohigher costs and decreased funding, we will experience change of the competitive landscape and continued cost control. The latter will lead to branch network optimization and, further on, the development and improvement of alternative channels to classic bank branch.
Note: Upon writing this study, official data regarding the evolution of the banking market in 2012is still being published. The analysis andformulated trends have been realized based on data availableuntil December 2012. As future official data will be published, the study will be updatedaccordingly.
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